To establish the correct understanding of the correlation mechanism between renewable energy consumption and urbanization and thus achieve sustainable development, this study selects panel data of 30 provinces (autonomous regions, municipalities) in China from 2006-2019, measures the level of new urbanization in China using the entire-array-polygon indicator method, and constructs a dynamic panel threshold model to analyze the nonlinear impact of renewable energy consumption on the development of new urbanization. The main findings are as follows: (1) Overall, China’s new urbanization level shows a decreasing development trend from the eastern to the northeastern, central and western regions, with an obvious regional development gradient pattern. (2) Renewable energy consumption can significantly promote the process of new urbanization. (3) There is a nonlinear effect of renewable energy consumption on new urbanization. Specifically, with green investment, environmental regulation and foreign direct investment as threshold variables, the positive effect of renewable energy consumption on new urbanization gradually increases after crossing the threshold value.