Solar investment surpasses oil, according to the IEA.
According to the International Energy Agency (IEA), global investments in clean energy technologies are expected to exceed $1.7 trillion in 2023, with solar energy poised to outshine oil production spending for the first time. In its World Energy Investment Report, the IEA forecasts that solar investments will attract over $1 billion per day in 2023.
Fatih Birol, the executive director of the IEA, announced that solar investment is set to overtake the amount of funding allocated to oil production. He highlighted that current investment in fossil fuels is more than double the levels required in the Net Zero Emissions by 2050 Scenario. Birol emphasized the increasing shift towards clean energy, stating that “clean technologies are pulling away from fossil fuels.” He noted that for every dollar invested in fossil fuels, approximately $1.7 is now being directed towards clean energy, compared to a ratio of one-to-one five years ago.
The World Energy Investment Report projects that around $2.8 trillion will be invested globally in energy in 2023. Out of this total, $1.7 trillion is expected to be allocated to clean technologies, including renewables, electric vehicles, nuclear power, grids, storage, low-emissions fuels, efficiency improvements, and heat pumps. The remaining funds, slightly over $1 trillion, will be directed towards coal, gas, and oil.
Birol further stated, “Clean energy is moving fast – faster than many people realize.” He emphasized the rising investment trends in clean technologies, with solar energy leading the way and poised to surpass oil production investment for the first time.
According to Haitham Al Ghais, the Secretary-General of OPEC, the global oil sector will require a cumulative investment of $12.1 trillion until 2045, equating to around $500 billion annually. Al Ghais mentioned during the Annual Middle East Petroleum & Gas Conference that oil is expected to maintain the largest share in the energy mix, accounting for nearly 30% by the year 2045.
The IEA report highlights that low-emissions electricity technologies, led by solar energy, are expected to account for nearly 90% of investment in power generation. Consumers are also increasing their investments in electrified end-uses, with global heat pump sales experiencing double-digit annual growth since 2021. Electric vehicle sales are projected to surge by one-third this year, following a significant increase in 2022.
The IEA report highlights that low-emissions electricity technologies, led by solar energy, are expected to account for nearly 90% of investment in power generation. Consumers are also increasing their investments in electrified end-uses, with global heat pump sales experiencing double-digit annual growth since 2021. Electric vehicle sales are projected to surge by one-third this year, following a significant increase in 2022.
Several factors have contributed to the boost in clean energy investments in recent years. These include periods of robust economic growth, volatile fossil fuel prices raising concerns about energy security, and geopolitical events such as Russia’s invasion of Ukraine. Additionally, enhanced policy support through major actions like the US Inflation Reduction Act and initiatives in Europe, Japan, China, and other regions have played a significant role in driving clean energy investments.
The transition towards clean energy is gaining momentum globally as countries and businesses recognize the urgency to mitigate climate change and reduce carbon emissions. Solar energy, in particular, has emerged as a frontrunner in the clean energy revolution due to its abundant availability, falling costs, and technological advancements.
The IEA’s forecast underscores the shifting landscape of the energy sector, with solar investment surpassing traditional oil production spending. This significant milestone reflects the growing confidence in renewable energy sources and the increasing realization that clean technologies offer a sustainable and economically viable path forward.
Several factors have contributed to the boost in clean energy investments in recent years. These include periods of robust economic growth, volatile fossil fuel prices raising concerns about energy security, and geopolitical events such as Russia’s invasion of Ukraine. Additionally, enhanced policy support through major actions like the US Inflation Reduction Act and initiatives in Europe, Japan, China, and other regions have played a significant role in driving clean energy investments.
