Global investment in solar to surpass oil in 2023

According to the International Energy Agency (IEA), investment in clean energy is set to surpass spending on fossil fuels in 2023, with solar projects expected to outpace investments in oil production for the first time. The IEA’s World Energy Investment report reveals that annual investment in renewable energy has increased by nearly a quarter since 2021, compared to a 15% rise in fossil fuel investments.

Read: Realme officially launches in South Africa with budget options

The report highlights that approximately 90% of clean energy spending comes from advanced economies and China, underscoring the global disparity between rich and poor countries. Fossil fuel investment remains twice the level needed to achieve net-zero emissions by the mid-century target.

The IEA’s executive director, Fatih Birol, emphasizes the rapid progress of clean energy, noting that for every dollar invested in fossil fuels, about $1.70 is now being allocated to clean energy. This marks a significant shift from the one-to-one ratio observed five years ago.

Global energy investment is projected to reach around $2.8 trillion in 2023, with over $1.7 trillion expected to be directed towards renewables, nuclear power, electric vehicles, and efficiency improvements. The remaining $1 trillion is anticipated to be allocated to oil, gas, and coal, with demand for the latter reaching an all-time high, six times the level needed to achieve net zero by 2050.

Solar power spending is poised to exceed $1 billion per day or approximately $380 billion annually in 2023. This establishes solar energy as a powerful tool for rapid decarbonization of the economy. However, it is notable that some of the sunniest regions in the world have the lowest levels of solar investment, indicating room for further growth and development.

The IEA report also mentions that investment in new fossil fuel supply is expected to increase by 6% in 2023, reaching $950 billion. While the IEA did not explicitly restate its previous recommendation to refrain from funding new oil, gas, and coal projects, it remains clear that the fossil fuel industry exacerbates the severe impacts of climate change, as cautioned by scientists and international climate activists.