Investments in solar energy are growing. According to estimates by the International Energy Agency, they will exceed spending on oil production for the first time this year.
This year, for the first time, money invested in the expansion of solar energy will exceed investments in oil production. This is the current forecast by the International Energy Agency (IEA). According to the IEA, more than a billion dollars will flow into solar power every day in 2023, and thereafter it will be 380 billion dollars annually. In contrast, the IEA estimates investments in oil production at 370 billion dollars this year.
“Clean energy is developing fast – faster than many people think,” said IEA chief Fatih Birol. “For every dollar invested in fossil fuels, about $1.7 now goes into clean energy.” Five years ago the ratio was still one to one.
Coal demand in 2022 at all-time high
Investments in clean energy – which the IEA counts among other things renewable energy, electric cars and nuclear energy – are expected to reach 1.7 trillion dollars in 2023, the agency said at the presentation of its world energy investment report. In return, around a trillion dollars would be invested in fossil fuels such as oil, gas and coal. This means that annual investments in clean energy have increased by almost a quarter since 2021, while spending on fossil energy has increased by 15 percent.
According to the Paris-based agency, however, current spending on fossil fuels is still well above the level at which the climate neutrality agreed in the Paris climate agreement can be achieved by 2050. Global demand for coal reached an all-time high in 2022. In addition, coal investments this year would exceed the target level for 2030 by a factor of six.
industrialized countries and China at the top
In addition, the gap between rich and poorer regions in terms of investments is clearly noticeable. “The irony is that some of the sunniest places in the world have the lowest investments in solar energy,” said Dave Jones, head of data at think tank Ember, looking at the results.
The IEA found that around 90 percent of clean energy spending comes from developed countries and China. In countries of the Global South, factors such as higher interest rates, an unclear political framework and a weak network infrastructure slowed down investments. The international community still needs to do much more, especially to encourage investment in low-income countries where the private sector has been reluctant to get involved, the IEA warned.