Renewable energy is an alternative energy source that has the capability of promoting economic prosperity while ensuring the preservation of our environment. This paper seeks to examine relationships between renewable energy consumption and economic growth and the differential impact on both developed and developing economies. I employed a fixed effect co-panel regression model to a sample of the top thirty-nine renewable energy consuming countries for the period 1995–2019. Our key empirical findings reveal that renewable energy consumption is associated with a positive statistically significant impact on economic growth in developing countries; however, a negative impact was found among developed economies. This study extends investigation into possible determinants of renewable energy demand through the creation of a Cobb-Douglas production function. These findings have important implications for policymakers in revealing that renewable energy sources can offer an environmentally sustainable means of economic growth in the future, but a proper understanding of dynamics including capital and labor deepening channels is essential in developing appropriate policy.