Solar Energy Investment To Eclipse Oil Spending For The First Time, IEA Says

2023 Global Energy Investments Tilt Toward Clean Energy

solar energy panels in water

xu wu / Getty Images

Clean energy will account for about 60% of all global energy investment this year, the International Energy Agency said today, as investments in solar energy for the first time will surpass those for oil production.


  • Clean energy to account for 60% of all global energy investment this year.
  • Fossil fuel investment also will increase to levels exceeding those the IEA foresees necessary to produce net zero emissions by 2050.
  • Clean energy investment still lags considerably in emerging economies.

The IEA estimates global energy investment will total $2.8 trillion in 2023. That amount comprises an expected $1.7 trillion invested in clean energy, with the remainder spent on coal, crude oil and natural gas.

The investment in clean energy represents a 24% increase from just two years ago, compared with a 15% gain for fossil fuel investments. It's shift that will continue accelerating, said Fatih Birol, the IEA's executive director.

"Clean energy is moving fast—faster than many people realize," Birol said, noting that just five years ago, clean energy and fossil fuels received similar amounts of annual investment.

Led by solar, low-emissions electricity technologies will receive about 90% of this year's investment in power generation, the IEA predicted in its latest World Energy Investment report.

Consumers, though, also have focused more on using electricity to power their cars and heat their homes. The IEA projects electric vehicle sales will rise by a third this year from 2022, and sales of heat pumps likely will increase by more than 10% for the second straight year.

Global Energy Investment in Clean Energy & Fossil Fuels, 2015-2023e: IEA

IEA World Energy Investment Report 2023

Fossil Fuel Investments Also Will Rise

Meanwhile, investment in upstream oil and gas exploration and drilling also will increase 7%, the IEA projected, rebounding to levels prior to the Covid 19 pandemic.

That rebound, the IEA estimates, will push overall fossil fuel investment twice as high as the maximum required in 2030 to meet its target of net zero global emissions by 2050. Global coal demand reached an all-time high last year, and coal investment this year likely will equal six times the level needed by 2030 to hit the net zero target.

Still, traditional production investments now soak up less than half of the oil and gas industry's cash flow, compared with 80-90% annually from 2008 through 2017.

Emerging Economies Trail in Clean Energy Spending

But traditional fossil fuel spending still dominates energy investments in emerging economies, which face the biggest shortfall in global clean energy investment.

Ninety percent of this year's increase in clean energy investment will occur in developed countries and China. Since 2019, China, the European Union and the U.S. all have increased their annual clean energy investment by about $90-$185 billion. No other country or region has increased it by more than approximately $30 billion.

The IEA said myriad factors hamper clean energy investment in developing countries: higher interest rates and capital costs, governmental policies, weak power grids and financially strained utilities. Given those hurdles, the private sector has expressed reluctance to invest heavily in emerging economies.

Nonetheless, emerging economies, primarily in Latin America, account for a portion of the expected explosive growth in projects promoting hydrogen and carbon capture, utilization and storage during the next three years.

At the same time, production of lithium-ion batteries used in electric vehicles and for other power generation—despite rising production elsewhere—likely will remain concentrated in China through at least 2030.

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