IEA: Solar PV investment to surpass all technologies combined in 2024

Investment in solar PV now surpasses all other generation technologies combined says the IEA
China accounted for nearly half of solar PV investments in 2023. Chart: IEA

Investment in solar PV is expected to surpass all other generation technologies combined with over US$500 billion, according to a report from the International Energy Agency (IEA).

In its annual investment report, World Energy Investment, the IEA also highlights that for every US dollar invested in fossil fuels, two US dollars will be invested in clean energy this year. This is an increase from last year when the ratio was at US$1 versus US$1.7, respectively. Globally, clean energy technologies and infrastructure investment are expected to reach US$2 trillion in 2024.

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Falling module prices and easing supply chain pressures have offset the impact of high interest rates, as solar panel costs have decreased by 30% over the past two years. However, the growth of spending for renewables – and particularly distributed solar PV – is expected to continue at a slower pace in 2024 than previous years.

“This does not reflect a slowdown in the renewable power capacity added, as price decreases allow for more capacity to be added per USD spent. Nonetheless, grid and curtailment concerns, permitting delays and land availability remain constraining factors,” said the IEA.

Moreover, every dollar invested in wind and solar PV last year, yielded 2.5 times more energy output than a dollar spent on these technologies a decade ago.

Fatih Birol, executive director at IEA, said: “The rise in clean energy spending is underpinned by strong economics, by continued cost reductions and by considerations of energy security. But there is a strong element of industrial policy, too, as major economies compete for advantage in new clean energy supply chains. More must be done to ensure that investment reaches the places where it is needed most, in particular the developing economies where access to affordable, sustainable and secure energy is severely lacking today.”

Half of solar PV investments came from China in 2023

Region-wise, China invested the most in solar PV last year with US$220 billion, representing nearly half of global solar investment for the year. Capacity additions in the country increased by a factor of 2.5 compared to 2022, helped by falling module prices – which are nearing the bottom – and pandemic recovery effects.

Driven by public tenders and grid improvements, significant spending in India, Southeast Asia, Brazil and Africa has driven investment in renewables in emerging markets and developing economies outside China.

India alone tendered nearly 70GW of renewable capacity between April 2023 and March 2024, with half of it from solar PV. This is more than treble the capacity tendered during the prior period.

Investments in Africa are expected to nearly double in 2024 from 2020, with more than US$40 billion.

The residential market has seen an uptick in investment, which has doubled since 2015, going from 9% to 18% in 2023. Energy investments from private households have been driven by the growth of rooftop solar PV installations, building efficiency, and electric vehicle purchases.

Investing in grids

As frequent readers of PV Tech would know, grid bottlenecks and the need to invest in it have been an ongoing topic lately – especially in the US and Europe – and investments are on the rise according to the report. In 2024, grid spending is expected to hit US$400 billion, after a stagnation period of US$300 billion per year since 2015.

This increase is due to new policies and funding in Europe, the US, China and parts of Latin America. Investments in Latin America have nearly doubled since 2021, led by Colombia, Chile and Brazil, where spending doubled in 2023 alone.

However, grid investment in other regions still remains low, as advanced economies and China account for 80% of global grid spending.

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