Global investment in solar energy is predicted to exceed oil production for the first time in 2023, attracting over $1 billion a day, according to a new report from the International Energy Agency (IEA). The report projects that total energy investment will reach approximately $2.8 trillion in 2023, with over $1.7 trillion invested in clean energy technologies, such as electric vehicles (EVs), renewable energy, and storage.
IEA’s World Energy Investment report underlines the progress of the global energy transition. IEA Executive Director, Fatih Birol, announced that the surge in investment is due to declining costs of clean energy and governments recognizing renewable energy as a durable solution for both energy security and climate change. Moreover, clean energy technology manufacturing, including batteries, EVs, and solar panels, is being seen as the next industrial revolution, attracting substantial incentives for investors.
However, the report also highlights that fossil fuels, including coal, gas, and oil, are projected to attract slightly over $1 trillion in investment this year, which is more than double the levels required to achieve Net Zero Emissions by 2050. Coal investments, in particular, are nearly six times the 2030 requirements for a Net Zero Emissions scenario.
Despite international agreements to limit global warming and cut human-made carbon dioxide emissions, new funding continues to be allocated for fossil fuel exploration. Companies like BP are pursuing a dual strategy of investing in both hydrocarbons and the planned energy transition.
Birol emphasizes that clean energy is advancing faster than anticipated, stating, “For every dollar invested in fossil fuels, about 1.7 dollars are now going into clean energy.” This ratio has seen considerable improvement, as it was one-to-one just five years ago.
This report is being heralded as a landmark in the energy sector. Dave Jones, Head of Data Insights at energy think tank Ember, regards solar as a “true energy superpower” with the potential for rapid decarbonization of the economy. However, he highlights that the sunniest places in the world currently have the lowest levels of solar investment, which necessitates global attention.