More Investment In Solar Than Oil In 2023

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When I started writing on CleanTechnica in 2009, we were often writing about solar power. It was a hot, fast-growing industry. It was exploding and forecasts for it were enormous. Yet, investments in solar power were nowhere close to investments in oil, and anyone who suggested solar would surpass oil at some point soon-ish would typically be deemed mad, mental. Well, I guess it’s debatable whether 14 years is soon-ish or not, but as I look back from this moment in time, it seems like the snap of my fingers. According to the International Energy Agency (IEA), investment in solar is surpassing investment in oil. The milestone feels like it has a straight line back to 2009.

“Solar is the star performer and more than USD 1 billion per day is expected to go into solar investments in 2023 (USD 380 billion for the year as a whole), edging this spending above that in upstream oil for the first time,” the IEA writes in its latest report, World Energy Investment 2023.

“Clean energy is moving fast — faster than many people realise. This is clear in the investment trends, where clean technologies are pulling away from fossil fuels,” says 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.”

As far as the electricity generation sector goes, clean energy is doing its part to slow and hopefully eventually stop global heating.

“In the IEA World Energy Outlook 2021, we wrote that ‘the world is not investing enough to meet its future energy needs … IEA analysis has repeatedly highlighted that a surge in spending to boost deployment of clean energy technologies and infrastructure provides the way out of this impasse, but this needs to happen quickly or global energy markets will face a turbulent and volatile period ahead’

“This picture is starting to change: global energy investment is picking up, and the rise in clean energy investment since 2021 is leading the way, outpacing the increase in fossil fuel investment by almost three-to-one. Clean electrification is leading the charge. If it continues to grow at the rate seen since 2021, then aggregate spending in 2030 on low-emission power, grids and storage, and end-use electrification would exceed the levels required to meet the world’s announced climate pledges (the APS). For some technologies, notably solar, it would match the investment required to get on track for a 1.5°C stabilisation in global average temperatures (the NZE Scenario).”

There is no doubt — this is a huge milestone and represents great progress. It should be celebrated as such. However, that does not mean all is perfect. The IEA warns that we are still investing far too much in fossil fuels. Across the economy, we need to cut investments in inefficient and fossil fuel technologies. Indeed, while solar power is a great success story that we can cherish and celebrate, solar cannot do it alone, and not every solution is advancing as well or as quickly as solar.

“However, progress has been uneven. Investment in expanding and modernising grids is lagging behind in many countries. A rising share of solar and wind needs to be accompanied by spending on technologies that provide greater flexibility to power systems. Supply chain and skills bottlenecks could constrain growth. And, above all, the geographical imbalances in investment need addressing, with clean energy investment in many emerging and developing economies growing only slowly and the number of people without access to modern energy services remaining stubbornly high.

“Other pillars of clean energy transitions do not yet show the same positive dynamics as clean electrification. Investment in energy efficiency has been increasing, but is well off track to meet more ambitious climate scenarios. Investment in low-emission fuels is being spurred by new policy measures, but from a very low base.”

So, there is much to be done. But part of what must be done is celebrating successes when we have them. Therefore, in 2023, we need to celebrate solar power and the milestone it is achieving. Solar is surpassing oil. It’s a crossover for the history books.

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Zachary Shahan

Zach is tryin' to help society help itself one word at a time. He spends most of his time here on CleanTechnica as its director, chief editor, and CEO. Zach is recognized globally as an electric vehicle, solar energy, and energy storage expert. He has presented about cleantech at conferences in India, the UAE, Ukraine, Poland, Germany, the Netherlands, the USA, Canada, and Curaçao. Zach has long-term investments in Tesla [TSLA], NIO [NIO], Xpeng [XPEV], Ford [F], ChargePoint [CHPT], Amazon [AMZN], Piedmont Lithium [PLL], Lithium Americas [LAC], Albemarle Corporation [ALB], Nouveau Monde Graphite [NMGRF], Talon Metals [TLOFF], Arclight Clean Transition Corp [ACTC], and Starbucks [SBUX]. But he does not offer (explicitly or implicitly) investment advice of any sort.

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