Solar Power Leads Investment Boom Totaling $3.3Tn
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Recent data has revealed that total global investments in clean energy are expected to reach a whopping $3.3 trillion. A report from the International Energy Agency (IEA) predicts that green energy investments will hit record levels as investors become increasingly interested in renewable energy. As the most dominant source of clean energy, solar is predicted to attract $450 billion in funding in 2025.
Despite the economic and geopolitical challenges the world is facing, investor interest in renewable energy technology is still robust, and clean energy is set to attract two times more investment than fossil fuels. According to the agency, green technologies like renewables, nuclear energy, grid, and storage infrastructure will receive funding worth over $3 trillion in 2025, with investments in solar predicted to hit $450 billion, surpassing other forms of green energy like wind and geothermal.
The IEA’s World Energy Investment report points out how the increased investments in clean energy suggest an extended effort to cut down greenhouse gas emissions and indicate how much more influential industrial policy has become in recent years. Most countries have plans to phase fossil fuels out of their energy mix and replace them with renewables like solar and wind to lower carbon emissions and mitigate climate change. As such, investing in renewable technologies will be key to lowering global greenhouse gas emissions and achieving carbon neutrality.
Even though renewable energy tends to be cheaper than energy generated from fossil fuels, green energy projects typically require massive initial capital to launch. Without adequate investment, regions and countries that stand to benefit from renewables may be left behind in the transition to green energy. Solar currently outclasses other sources of green energy in total capacity and will attract a massive chunk of the $2.2 trillion that will be dedicated to building clean energy infrastructure in 2025.
Unsurprisingly, China will be the largest clean energy investor in the world. The East Asian nation already spends more on energy than any other country on the globe, and Beijing has invested significantly into energy to cut China’s reliance on oil and gas imports. Additional investments in solar energy and energy storage technology will bring China’s total investment in energy to a record $884 billion in 2025. China currently has a global monopoly on photovoltaic solar panel production and has the largest network of solar infrastructure on the globe.
The IEA report also recorded a 50% increase in nuclear energy investments in the past half-decade and notes that global spending on constructing and refurbishing nuclear energy facilities will hit over $70 billion this year. These investments will be critical to accelerating the transition to clean energy, especially in countries looking to reduce dependence on fossil fuels.
The growing appetite to invest in renewable energy gives industry actors like SolarBank Corp. (NASDAQ: SUUN) (Cboe CA: SUNN) (FSE: GY2) opportunities to attract investors and deliver better shareholder value over the coming years.
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