IEA: Solar Projects Surpass Oil Production Expenditures for the First Time

Investment in clean energy will increase its advantage over investment in fossil fuels in 2023, announced the International Energy Agency (IEA) on Thursday, and solar projects are expected to surpass expenditures for oil production for the first time.

Annual investment in renewable energy has risen by nearly a quarter since 2021 compared to a 15 percent increase for investments in fossil fuels, the IEA reported in its World Energy Investment report.

About 90 percent of clean energy consumption relates to advanced economies and China, highlighting the global gap between rich and poor countries as investments in fossil fuels are still twice the levels needed to achieve net zero greenhouse gas emissions by mid-century.

– Clean energy is breaking through quickly – faster than many people realize. For every dollar invested in fossil fuels, about $1.70 is now going into clean energy. Five years ago, that ratio was one to one – said IEA Executive Director Fatih Birol.

About $2.8 trillion will be invested in energy worldwide this year, of which more than $1.7 trillion is expected to go towards renewable energy, nuclear power, electric vehicles, and efficiency improvements.

The remaining trillion dollars will go to oil, gas, and coal. Demand for coal will reach an all-time high, six times higher than the level needed by 2030 to achieve carbon neutrality by 2050.

Current fossil fuel consumption is significantly higher than what is needed to meet climate goals by mid-century, the agency said.

In 2023, spending on solar energy could exceed $1 billion per day or about $380 billion annually.

This crowns solar energy as a true energy superpower. It emerges as the biggest tool we have for rapid decarbonization of the entire economy. The irony remains that some of the sunniest places in the world have the lowest levels of investment in solar energy – stated Dave Jones, head of data insights at the energy think tank Ember.

Investment in new fossil fuel supply will increase by six percent in 2023 to $950 billion, the IEA added.

OPEC stated that calls from the IEA to stop investing in oil undermine global energy security and growth. Scientists and international climate activists have warned that the fossil fuel industry exacerbates the catastrophic effects of climate change.