Solar Power Set to Top Oil in Global Investment

Spurred in part by the Russian invasion of Ukraine, global investment in solar power is set to overtake investment in oil for the first time, a new report by the International Energy Agency said Thursday.

“Clean energy is moving fast – faster than many people realize,” IEA Executive Director Fatih Birol said in a statement. “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.”

Worldwide energy investment is set to hit $2.8 trillion this year, the report said, with more than $1.7 trillion going to renewables, nuclear power, electric vehicles, and efficiency improvements.

An estimated $1 trillion will go to oil, gas and coal. 

“One shining example is investment in solar, which is set to overtake the amount of investment going into oil production for the first time,” Birol said. Investment in solar power is expected to reach $382 billion this year, ten billion dollars more than the $372 billion figure for global oil production.

The accelerating shift to green energy production is due partly to Russia’s attempts to blackmail and punish Europe for its support of Ukraine following Russia's 2022 invasion, the report said. Russia, a natural gas powerhouse, slashed the European Union’s pipeline supply by as much as 80 percent last year, slapping customers with staggering energy bills and fuel shortages. That forced a turn to alternative energy investments.

“This led to strong price and policy incentives for investors to step up non-Russian gas supply, build up alternative delivery infrastructure, and scale up alternatives to natural gas,” the report said. “All of these effects are visible in our analysis.”

The Ukraine war has also spurred investment in new infrastructure for natural gas and liquid natural gas from non-Russian sources.