Oil Investments Surpassed by Investment in Solar Energy

This year investments in solar projects are predicted to outpace those on oil production for the first time in history. Overall, investments in clean energy will increase their lead over those in fossil fuels in 2023.

Since 2021 the investments in clean energy have seen an increase of circa 25% while those in fossil fuel increased by only 15%. Right now, for every dollar invested in fossil fuels, about 1.7 dollars are going into clean energy. 

It is expected that in 2023 circa $1.7 trillion of the $2.8 trillion of worldwide energy investments will go towards clean energy solutions: such as renewables, nuclear power, electric vehicles, and energy efficiency improvements. 

Figure 1: Solar Farm.

Investments in Solar

Solar energy is becoming the key solutions for the decarbonisation of the economy. In 2023 solar projects are expected to see a significant amount of dollars invested. In fact, circa $380 billion will be invested this year, that is more than $1 billion per day [1]. A significant amount of the money invested into solar will be invested by China [2]. 

The main drivers for the push for clean energy are: 

• Solar and wind power costs have decreased at a significant pace and are still reducing. 
• Following the invasion of Ukraine many governments now see clean energy technology (renewables, electric cars, nuclear power) as a solution to energy security problem, in addition to climate change.
• Clean technology is becoming part of the industrial strategy of many governments [3]. 

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References

[1] Solar energy is becoming the key technology for the decarbonisation of the economy, Reuters, date: 25/05/2023, accessed on: 30/05/2023.

[2] Investment in solar energy set to pass oil for first time, boosted largely by China: report, Addison Smith, date: 26/05/2023, accessed on: 30/05/2023.

[3] Solar investment set to overtake oil production and attract over $1 billion a day in 2023, IEA says, Anmar Frangoul, date: 25/05/2023, accessed on: 30/05/2023.