World investing more in solar than oil as investment in renewables soars

Global investment in solar power is expected to overtake investment in oil for the first time ever this year, as spending on renewables continues to increase more than spending on fossil fuels, according to the International Energy Agency. And yet, fossil fuel investment is still too high to reach any net zero goals by 2050.

A tree surrounded by solar panels in Los Arcos, northern Spain, on 24 February 2023. Investment in solar energy is expected to overtake investment in oil in 2023, according to the IEA. © Alvaro Barrientos/AP

In its latest report on energy investment, the Paris-based International Energy Agency noted that while clean energy spending is outpacing spending on fossil fuels, investment in fossil fuels is still much higher than it should be to reach the goal of net zero emissions by 2050.

In 2023, out of a record high investment in energy of $2.8 trillion, investment in renewables, nuclear power, electric vehicles and efficiency improvements is expected to reach $1.7 trillion (1.59 trillion euros) – a 24 percent increase from 2021, while the increase in fossil fuel investment was 15 percent over the same period of time.

"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,” IEA executive director Fatih Birol said in a statement accompanying the report.

Price, supply concerns

High oil prices and concerns about supply has pushed up spending on renewables, with solar “set to overtake the amount of investment going into oil production for the first time," Birol said.

The IEA expects investment in solar power – solar panels in particular – to reach $380 billion (354 billion euros) in 2023, while investment in oil exploration and extraction is expected to be $370 billion (345 billion euros).

• French parliament votes to make solar panels compulsory on large car parks

The low price of generating solar power will help move forward efforts to expand the market for electric cars.

And yet, energy companies are not putting considerable funds into the transition to green energy, and an expected rebound in oil and gas investment will push back any net zero goals.

The largest increases in fossil fuel investment are in the Middle East, whereas clean energy investment is concentrated in China and more developed countries.

(with wires)