More money is being poured into solar power than all other electricity sources combined, with investment expected to reach half a trillion dollars this year, the world’s top energy research body said Thursday.
The International Energy Agency (IEA) predicts in a report that global investments in clean energy will reach $2 trillion this year, twice the amount going to fossil fuels.
It said combined investments in renewable energy and networks would overtake the amount spent on fossil fuels for the first time in 2023.
“Investments in clean energy are setting new records, even in challenging economic conditions, underscoring the momentum behind the new global energy economy,” IEA Executive Director Fatih Birol said in a statement accompanying the agency’s annual World Energy Investment report.
Companies and governments around the world are increasing spending on clean energy production to reduce CO2 emissions from burning fossil fuels that are driving deadly climate change.
According to the report, improved supply chains and lower costs are driving investment in forms of so-called clean energy, including solar panels, wind turbines, electric cars and heat pumps, as well as nuclear power generation.
Combined investments in renewables and nuclear energy for electricity generation are now expected to be ten times the amount going into fossil fuel energy, mainly through solar energy, with China investing the largest share.
“More money is now going into solar energy (photovoltaic panels) than all other electricity generation technologies combined,” the report said.
The cost of solar panels has fallen 30 percent in the past two years, and by 2024 “solar investment will grow to $500 billion as falling module prices drive new investment.”
By comparison, global upstream investment in oil and gas is expected to increase by seven percent to $570 billion in 2024, following a similar increase in 2023.
However, the IEA warned of “major imbalances and shortfalls in energy investment flows in many parts of the world” where clean energy projects remain unaffordable.
Excluding renewable energy giant China, the $300 billion invested by emerging and developing economies was “well below what is needed to meet growing energy demand in many of these countries.”
“More needs to be done to ensure that investments go where they are needed most,” Birol said.
The IEA said meeting global medium-term targets to reduce harmful CO2 emissions will require doubling investment in renewable energy worldwide by 2030.
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