In its medium-term renewable market report, the IEA said more supportive policies in the US, China, India and Mexico means renewables will remain the fastest growing source of electricity generation between 2015 and 2021.
The IEA expects renewables to increase its share in generation from 23% last year, to 28% by 2021.
"Renewables are expected to cover more than 60% of the increase in world electricity generation over the medium term, rapidly closing the gap with coal," the IEA said.
"Generation from renewables is expected to exceed 7,600TWh by 2021 — equivalent to the total electricity generation of the United States and the European Union put together today."
The agency also said costs of wind power and solar PV are expected to fall 15% and 25% respectively.
"We are witnessing a transformation of global power markets led by renewables and, as is the case with other fields, the centre of gravity for renewable growth is moving to emerging markets," said IEA executive director Fatih Birol.