Global solar investment to outpace upstream oil in 2023 at $380 billion

Global investment in solar power generation is expected to reach $1 billion per day, according to a new report by the International Energy Agency (IEA), which shows clean energy funding outpacing fossil fuels in 2023.

“Clean energy is moving fast, faster than many people realize. This is clear in the investment trends, where clean technologies are pulling away from fossil fuels,” said IEA executive director Fatih Birol. “For every dollar invested in fossil fuels, about 1.7 dollars are now going into clean energy. Five years ago, this ratio was one-to-one. One shining example is investment in solar, which is set to overtake the amount of investment going into oil production for the first time.”

The IEA’s 2023 World Energy Investment report, released today, shows solar investments reaching $380 billion in 2023, surpassing upstream oil at about $370 billion. Low-emissions power is expected to account for almost 90% of total investment in electricity generation this year.

About $2.8 trillion is set to be invested globally in energy in 2023, of which more than $1.7 trillion is expected to go to clean technologies — including renewables, electric vehicles, nuclear power, grids, storage, low-emissions fuels, efficiency improvements and heat pumps — according to the IEA report. The remainder, slightly more than $1 trillion, is going toward coal, gas and oil.

Annual clean energy investment is expected to rise by 24% between 2021 and 2023, driven by renewables and electric vehicles, compared with a 15% rise in fossil fuel investment over the same period. But more than 90% of this increase comes from advanced economies and China, presenting a serious risk of new dividing lines in global energy if clean energy transitions don’t pick up elsewhere.

Led by solar, low-emissions electricity technologies are expected to account for almost 90% of investment in power generation. Consumers are also investing in more electrified end-uses. Global heat pump sales have seen double-digit annual growth since 2021. Electric vehicle sales are expected to leap by a third this year after already surging in 2022.

Clean energy investments have been boosted by a variety of factors in recent years, including periods of strong economic growth and volatile fossil fuel prices that raised concerns about energy security, especially following Russia’s invasion of Ukraine. Enhanced policy support through major actions like the U.S. Inflation Reduction Act and initiatives in Europe, Japan, China and elsewhere have also played a role.

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