Over $22 Trillion Expected In Clean Energy Investment in 2024-2029

By the year 2030, the global energy landscape will be unrecognizable, transformed by a seismic shift towards sustainability and innovation. The International Energy Agency's World Energy Outlook paints a vivid picture of this future: electric vehicles will dominate the roads, their numbers nearly tenfold greater than today. Solar photovoltaic (PV) capacity is set to eclipse the entire output of the current U.S. power system, heralding an era where renewables account for nearly half of the global electricity mix—a significant leap from today's 30%. In a world increasingly turning its back on fossil fuels, electric heating systems will become the norm, outselling traditional fossil fuel boilers. The winds of change are equally strong offshore, with investment in wind projects poised to triple that of new fossil fuel power plants. Echoing the consensus of leading energy authorities and research, the decades ahead will witness an electrifying transition: from reliance on fuels to a predominance of electricity, and from fossil-fueled power to a world powered by renewables, with solar energy shining brightly as the new cornerstone of our energy paradigm. In essence, solar energy is set to become the new oil, powering our future with clean, abundant light.

In 2023, solar PV, spanning utility-scale to small systems, makes up two-thirds of the global renewable capacity increase.

However, compared to oil markets it seems to become even less diversified - China dominating nearly every stage of solar panel production: as of 2023, it produces 91% of the world's polysilicon, over 97% of global production of ingots and wafers, and around 80% of the solar cells market and 83% of the world’s global solar panel market. In contrast, the U.S. does not manufacture any ingots, wafers, or PV cells, and contributes to only 2% of the global solar panel production. Manufacturing costs for solar panels in the U.S. are 44% higher than in China. Similarly, the hypothetical production costs for solar panel components, including cells, ingots, and wafers, are estimated to be 51% higher in the U.S. compared to their counterparts in China.

In 2023, investments in renewables totaled approximately $1.7 trillion. Aiming to triple this by 2030 implies an annual investment of about $5.1 trillion by 2029. Assuming a steady annual increase leading up to 2030, the cumulative global investment in clean energy from 2024 to 2029 is projected to hit $22.1 trillion, based on my calculations. According to my estimation, if the growth rate of investments in the solar industry mirrors the average growth rate of clean energy investments, we can expect the investments in the solar sector to exceed $5.2 trillion during the same timeframe.

Thus, for numerous countries, particularly the U.S. and EU, the pressing question now is how investing in solar energy can bolster their own energy security. Additionally, it makes sense to assess what portion of this investment can positively impact their GDPs.

Can the U.S. and EU secure a competitive edge in the solar energy sector, or will China continue to dominate the future of "bright energy"?

I believe, with strategic investments in innovation, supportive policies for renewable energy, and a focus on sustainable manufacturing, the U.S. and EU have the potential to challenge China's current leadership. By leveraging collaborative efforts and prioritizing energy independence, these regions can indeed make significant strides in the solar industry. Despite China's formidable position, the rapidly evolving nature of solar technology and global energy needs presents a window of opportunity for the U.S. and EU to influence and potentially lead in the solar energy landscape.

Author: Julia Daviy Berezovska