Renewables spending must double as pandemic squeezes broader energy funding – IEA

Facebook
Twitter
LinkedIn
Reddit
Email
Image credit: Science in HD / Unsplash

The International Energy Agency (IEA) has urged world countries to drive a doubling of renewable investment this decade, helping reverse a flatlining aggravated by the COVID-19 outbreak.

A new report from the agency warned the pandemic will trigger a US$400 billion drop (equivalent to a 20% contraction) in global energy spending in 2020, where a 2% year-on-year increase had been predicted before the health emergency came to grip the world.

This article requires Premium SubscriptionBasic (FREE) Subscription

Unlock unlimited access for 12 whole months of distinctive global analysis

Photovoltaics International is now included.

Not ready to commit yet?
  • Regular insight and analysis of the industry’s biggest developments
  • In-depth interviews with the industry’s leading figures
  • Unlimited digital access to the PV Tech Power journal catalogue
  • Unlimited digital access to the Photovoltaics International journal catalogue
  • Access to more than 1,000 technical papers
  • Discounts on Solar Media’s portfolio of events, in-person and virtual

Or continue reading this article for free

The IEA – which had said last week COVID-19 would “hurt but not halt” renewable deployment – followed a similar line with its new analysis on energy investment, noting that funding to renewables is proving “more resilient” and will grow to hit a larger share of energy spending in 2020.

According to the new projections, capital spending on solar, wind and others will (see table below) drop worldwide by 10% year-on-year. The fall will be markedly less pronounced than across upstream oil and gas (33%) and fossil fuels (15%), the IEA's report said.

However, the agency went on to say, the pandemic’s implications will be clear for utility-scale solar and wind players, with Q1 2020 financial investment decisions dipping to levels not seen since 2017. For consumer-reliant distributed solar operators, the impacts will be “more dramatic”, the IEA said.

As the IEA noted, the COVID-19 blow follows years of flatlining clean energy investment. The annual funding volumes of US$219-264 billion since 2015 are “nowhere near enough” and must more than double over the next 10 years to keep global warming at bay, said executive director Fatih Birol.

Global investment across energy segments in 2018, 2019 and 2020

Year Renewables Fossil fuels Upstream oil and gas All energy sectors
2018 US$308 billion US$130 billion US$480 billion US$1.9 trillion
2019 US$311 billion US$130 billion US$483 billion US$1.89 trillion
2020 (estimate) US$281 billion US$111 billion US$322 billion US$1.52 trillion
Source: IEA’s World Energy Investment 2020

‘Deeply troubling’ slowdown as COVID-19 grips state-run firms

The IEA’s solution to reviving green energy investment was the same the agency has been advocating for in recent weeks. Policymakers have, the watchdog say, a chance to embed energy and climate goals in the COVID-19 stimulus packages, much like EU lawmakers are working to do.

The IEA acknowledged the current risk of countries falling back on coal and other “familiar levers” of growth. If they back solar and wind instead, nations may find these technologies are among the cheapest form of new generation and make financial sense for investors, the agency said.

However, the potential on paper does not guarantee countries will push green energy to the heart of COVID-19 recovery plans, the IEA said, noting that the momentum around institutionally financed renewables has so far revolved around developed European and North American nations.

Describing the findings of a likely 20% drop to energy funding in 2020 as “deeply troubling”, the IEA’s  Birol pointed at the issue of increasingly indebted state-run firms, with finances squeezed by COVID-19. As he noted, these operators account for over half of energy investment in the developing world.

“Energy-related government revenues – especially in the main oil and gas exporting countries – have been profoundly affected, with knock-on effects on the budgets available to state-owned energy enterprises,” the IEA’s report indicated.

The warnings around stalled renewables investment come as Solar Media’s own events suggest solar finance is weathering COVID-19 impacts so far. As firms noted at the recent Large Scale Digital series, subsidy-free appetite remains strong despite the blow from tumbling power prices.

PV Tech has set up a dedicated tracker to map out how the COVID-19 pandemic is disrupting solar supply chains worldwide. You can read the latest updates here.

If you have a COVID-19 statement to share or a story on how the pandemic is disrupting a solar business anywhere in the world, do get in touch at [email protected] or [email protected].

25 November 2025
Warsaw, Poland
Large Scale Solar Central and Eastern Europe continues to be the place to leverage a network that has been made over more than 10 years, to build critical partnerships to develop solar projects throughout the region.

Read Next

August 28, 2025
Latin America has the potential to unlock billions in clean energy investment if it aligns national policies with global sustainability goals and investor expectations.
August 28, 2025
Venture capital firm Pacific Channel has launched Fund V, which targets 10GW of solar, wind, and energy storage in New Zealand.
August 26, 2025
ABO Energy has closed its first syndicated loan agreement worth €240 million (US$279.8 million) to develop and construct more wind, solar and storage project.
August 26, 2025
Daqo New Energy has posted gross losses of US$81.4 million in Q2 2025, up from losses of US$81.5 million in Q1.
August 26, 2025
Investment in utility-scale solar fell by 19% in the first half of 2025, as global investment in all renewable energy projects grew by 10%.
Premium
August 22, 2025
Radovan Kopecek and Joris Libal examine the technological and economic factors driving PV’s ascendancy, with emphasis on bifacial BC modules.

Subscribe to Newsletter

Upcoming Events

Solar Media Events
September 16, 2025
Athens, Greece
Solar Media Events
September 30, 2025
Seattle, USA
Solar Media Events
October 1, 2025
London, UK
Solar Media Events
October 2, 2025
London,UK
Solar Media Events
October 7, 2025
Manila, Philippines