According to the International Energy Agency, the investment ratio has shifted significantly over the past five years. Currently, for every dollar in fossil fuels investment, a staggering 1.7 dollars are being invested in clean technologies
Global fossil fuel investment is decreasing as the world moves towards clean energy. Efforts to reduce carbon emissions are no longer just something we expect in the future – This is happening right now.
In 2023, there will be a total investment of about $2.8 trillion in the global energy sector. Out of this, approximately $1.7 trillion will be invested in clean technologies. solar energy will be leading the way as the primary source of energy generation. The remaining $1 trillion will be spent on fossil fuel investment.
Between 2021 and 2023, the annual investment in clean energy will increase by 24%. This growth is due to the renewables development and electric vehicles. In comparison, fossil fuel investment will rise by 15% during the same period.
How Much Renewable Energy Sector is expected to Grow?
About $700 billion investment is expected from renewable energy sector in the future. The IEA predicts that the total investment in solar will reach up to $380 billion, surpassing the spending on oil for the first time.
In addition to the widespread adoption of clean energy, there is a global trend toward electrification. Sales of heat pumps have been growing at a double-digit annual growth rate since 2021 worldwide. Furthermore, the electric vehicles sector played contributed one-third this year.
China maintained its position as the leading global investor in clean energy, with spending of over $170 billion. The European Union followed closely behind, with an increase in investment of approximately $150 billion. The United States will contribute around $100 billion in clean energy this year. Furthermore, clean technologies will remain highly competitive in today’s fossil fuel investment energy market.
Fossil Fuel Investment in Energy Sector
In 2022, China experienced significant growth in solar energy sectors, with an addition of over 100 GW. Additionally, Europe, India, and Brazil saw a substantial increase in annual installations, with growth rates of 40%.
The United States is witnessing a high demand for solar energy. According to the 2023 Solar Snapshot report by Aurora Solar, 45% of solar professionals have reported increased demand for solar installations due to the Inflation Reduction Act. Additionally, another 40% anticipate a surge in demand in the near future. Furthermore, 70% of these professionals observed growth in their business size. The report also highlights that nearly 77% of homeowners either already have solar panels installed or express a keen interest in purchasing them.
Based on the current growth rate observed since 2021, if investments in clean energy continue to expand, the cumulative expenditure of 2030 on low-emission power, grids, storage, and electrification for various applications would surpass the levels necessary to fulfill the global climate commitments made by nations worldwide.