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Solar power investment will overtake oil in 2023, says IEA

Global investment in clean energy – led by solar power – will rise to US $1.7 trillion this year and overtake fossil fuels for the first time.

Another big milestone in the energy transition is approaching: 2023 is set to be the year that solar power overtakes oil for investment.

Out of the projected US $2.8 trillion global energy investment in 2023, US $1.7 trillion is expected to go towards clean technologies, according to the IEA’s latest World Energy Investment report. The remainder will go towards fossil fuels.

As IEA Executive Director Fatih Birol put it, “Clean energy is moving fast – faster than many people realise… 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. One shining example is investment in solar, which is set to overtake the amount of investment going into oil production for the first time.”

The IEA expects annual clean energy investment to rise by 24% between 2021 and 2023 compared to a 15% rise in fossil fuel investment. One risk to watch is that advanced economies and China account for 90% of this increase, posing the threat of divisions in global energy if other countries lag on the transition. That’s something we’re actively addressing at Lightsource bp, as we now operate in 19 countries including growing economies like Brazil, India and Egypt.

What’s driving the rise in renewables? Everything from electric cars to the extreme volatility in fuel prices following Russia’s invasion of Ukraine. Major policy support – from the US Inflation Reduction Act to initiatives in Europe, China and elsewhere – is pushing the accelerator pedal on the shift to clean power.

The IEA notes that low-emissions electricity technologies, led by solar, are expected to account for 90% of investment in power generation, with changing consumer habits playing a role too. Heat pump sales have made double-digit growth since 2021, while electric vehicle sales are expected to surge by a third this year to cement recent rises.

There is another side to the story, however: a rebound in fossil fuel investment is putting our net-zero future at risk, the IEA warns.

At Lightsource bp, we are growing teams, partnerships and projects around the world to speed up the transition to clean power and fight the climate crisis with the urgency it needs. We have doubled our headcount over two years and have ambitious plans to scale up.

Want to join the renewable race? Visit our careers page.

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