Global investment in solar energy exceeds oil for the first time

If the 20th century was the century of oil, 2023 will mark a historic turning point on the calendar.

Oliver Thansan
Oliver Thansan
25 May 2023 Thursday 22:20
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Global investment in solar energy exceeds oil for the first time

If the 20th century was the century of oil, 2023 will mark a historic turning point on the calendar. It will officially pass to the era of the sun. At least as far as investments are concerned. This was certified yesterday by the International Energy Agency (IEA) in its World Energy Investment 2023 report.

This body estimates that investment in solar energy will exceed for the first time in 2023 the money allocated to oil production. The study does not give concrete figures of this sorpasso, but aggregate data. Thus, global investment in clean energy (ie low CO2 emissions) will increase this year to exceed 1.59 trillion euros.

This includes renewables, electric cars, grids and storage, low emission fuels, efficiency improvements, heat pumps or nuclear power. Between 2021 and 2023, its growth will be 24%.

On the other front, some 930,000 million euros will go to coal, gas and oil. Its increase, in the last three years, will have been 15%. Therefore: not only is more invested in green energy than in fossil energy, but also its growth rate is higher. “Clean energy is moving fast, faster than many people realize,” said IEA director Fatih Birol. "Investors are betting on this sector because they do good business and not just to save the planet," he added.

There is a data that is indicative. For every dollar invested in fossil fuels, currently 1.7 go to clean energy. Five years ago, this ratio was one to one.

The fact that investment in solar energy exceeds that received by the oil sector, apart from its symbolic value, has a temporary explanation. Today, solar energy is the gateway to a much greater electrification that will take place in the coming years, when the use of electricity to recharge cars or heat homes will be extended.

“In turn, consumers are increasingly investing in electrified goods. Heat pumps have been growing at double digits since 2021. Sales of electric cars will increase by a third this year, after resurfacing last year”, they state in the study.

"If it is true that in the last decade the cost of the panels had fallen by up to 80%, now the prices have stabilized, but in proportion they are capable of offering more power", comments Esther Morlanes, general director of Alterna Energía, a company specialized in self-consumption for companies.

"Large companies install solar panels for a matter of sustainability and social responsibility, in addition to achieving savings and security in supplies," says Morlanes. The payback period for the boards is typically six to seven years. “Solar energy has another advantage over oil: it is produced close to where it is consumed. There are no losses or transportation costs. And, in the future, investments in energy storage will open a new potential for this industry”, she assures.

However, it is important to highlight the overwhelming leadership of China. Many European companies still find it more profitable to buy the material in that country than to manufacture it in Europe. Of the top ten manufacturers of solar panels with the largest capacity, eight are Chinese. The share of the country's world production is greater than 80%, which can reach more than 95% in some components. A worrisome dependency.

In this sense, the director Fatih Birol warned in an interview that “Beijing is the dominant actor. Thinking that Europe will be able to replace China or take away a large part of the market is not the correct strategy. It is better for the EU to bet on technologies such as offshore wind, hydrogen or heat pumps”.