Solar energy investment set to outstrip oil for the first time this year

Solar energy investments are set to outstrip investments in oil for the first time this year, a new report from the International Energy Agency said.

More than $1 billion per day is expected to be spent on solar investments in 2023.

The global rise in electricity produced from clean or renewable sources is pushed forward, in large part, by major investments in clean energy from the Chinese government. Policies like the U.S.’s Inflation Reduction Act, and energy security concerns driven by Russia’s full-scale invasion of Ukraine, have also boosted spending on clean energy, the IEA said.

China is leading the way in developing solar power globally, figures from Our World in Data show. Solar generated nearly 4% of China’s electricity in 2021, a jump from 3.3% in 2020. And the country is surging forward in further solar energy production this year: Bloomberg reports that China has installed three times as much capacity for solar between January and April, compared to the same period in 2022.

Between 2019 and 2023, China invested $184 billion in clean energy —more than the $154 billion spent by the EU, and $97 billion by the U.S., the IEA report shows. Over the same period, investments in clean energy in Indonesia and Russia decreased by $1 billion and $4 billion, respectively.

Global investment in clean energy has been rising steadily since 2018. The IEA estimates that $2.8 trillion will be invested in all energy sources this year, with $1.7 trillion of that dedicated to clean energy. $659 billion is expected to be spent on renewable energy sources, and $6.3 billion on nuclear projects — a $1 billion rise from 2022.

“We will soon start to see a very different energy system emerging and we can keep the 1.5 C goal alive,” IEA chief Fatih Birol told the Financial Times.