More money is currently flowing into solar energy than into all other sources of electricity combined; this year, investments are expected to reach half a trillion dollars, the world’s leading energy research institute announced on Thursday.
The International Energy Agency (IEA) predicts in a report that global investment in clean energy will reach $2 trillion this year, twice the amount invested in fossil fuels.
It said total investment in renewable energy and grids would exceed spending on fossil fuels for the first time in 2023.
“Investments in clean energy are reaching new records even in challenging economic conditions, underscoring the momentum behind the new global energy economy,” said Fatih Birol, IEA Executive Director, in a statement on the agency’s annual World Energy Investment Report.
Companies and governments around the world are increasing spending on clean energy production to reduce carbon dioxide emissions from burning fossil fuels that drive deadly climate change.
The report says improved supply chains and lower costs have led to increased investment in forms of so-called clean energy, including solar panels, wind turbines, electric cars and heat pumps, as well as nuclear power generation.
Total investment in renewable energy and nuclear power for electricity generation is now expected to be ten times higher than investment in fossil fuels, especially solar energy, with China accounting for the largest share.
“Today, more money is flowing into photovoltaics (PV) than into all other electricity generation technologies combined,” the report states.
The cost of solar panels has fallen 30 percent over the past two years, and by 2024, “investment in photovoltaics will rise to $500 billion as falling module prices spur new investment.”
By comparison, global upstream investment in the oil and gas industry is expected to increase by seven percent to $570 billion in 2024, following a similar increase in 2023.
However, the IEA warned of “large imbalances and shortfalls in energy investment flows in many parts of the world,” where clean energy projects remain prohibitively expensive.
Except for China, the renewable energy giant, the $300 billion invested by emerging and developing countries remained “far below what is needed to meet the growing energy needs in many of these countries.”
“More needs to be done to ensure that investments reach where they are most needed,” said Birol.
To achieve medium-term global targets for reducing CO2 emissions, investments in renewable energy worldwide would need to be doubled by 2030, the IEA said.
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