Investments in Solar PV to Cross USD 500 Billion in 2024: IEA

The International Energy Agency (IEA) released the World Energy Investment report providing a full update on the investment picture in 2023 and an initial reading of the emerging picture for 2024. 

The report provides insights into the status of investments in the solar industry along with other renewable sectors. It states that the global energy investment is set to exceed USD 3 trillion for the first time in 2024, with USD 2 trillion going to clean energy technologies and infrastructure.

Reportedly, Solar panel costs have plummeted by about 30 percent in the past two years, and costs for minerals and metals vital for energy transitions have similarly decreased, particularly those essential for batteries.

With the conclusion of the era of inexpensive borrowing, certain investment avenues are hindered by elevated financing expenses, states the report. Nevertheless, the effect on project economics has been somewhat mitigated by the alleviation of supply chain constraints and declining prices.

Investments in solar photovoltaic (PV) technology within the power sector are expected to surpass USD 500 billion in 2024, outstripping all other generation sources combined. While growth might taper off slightly in 2024 owing to declining PV module prices, solar power retains its pivotal role in the power sector's evolution. Notably, in 2023, every dollar invested in wind and solar PV yielded 2.5 times more energy output compared to a decade earlier for the same technologies.

In 2015, the ratio of clean power to unabated fossil fuel power investments was roughly 2:1. In 2024, this ratio is set to reach 10:1. Interestingly, the rise in solar and wind deployment has driven wholesale prices down in some countries, occasionally below zero, particularly during peak periods of wind and solar generation.

The IEA suggests a potential upswing in energy investments, with clean energy investments projected to reach around USD 320 billion in 2024, marking a 50 percent increase since 2020. This surge in investments is chiefly driven by heightened investment in renewable power, comprising half of all power sector investments.

Advancements in countries like India, Brazil, parts of Southeast Asia, and Africa are attributed to new policy measures, effective management of public tenders, and enhancements in grid infrastructure. Notably, Africa's clean energy investments in 2024, surpassing USD 40 billion, are nearly double those recorded in 2020.

However, disparity exists in renewable energy investments worldwide. For example, for every dollar allocated to battery storage in advanced economies and China, only one cent was invested in other Emerging Markets and Developing Economies (EMDE). Further, the Advanced economies and China collectively contribute to 80 percent of global grid spending. In Latin America, investments have nearly doubled since 2021, particularly in countries like Colombia, Chile, and Brazil, where spending doubled in 2023 alone. Despite this growth, investment levels remain alarmingly low in other regions. Looking at the bigger picture, this raises the concern of unequal investments toward the growth of renewable worldwide.