The reason is twofold. For one, clean energy costs have plummeted over the last decade — a decline that has also resulted in every dollar spent on wind and solar now going more than twice as far in terms of energy output as a dollar went a decade ago. Second, investment has also gotten a boost from the growing number of countries that have adopted emissions reductions goals in recent years.
Most clean energy investment is currently flowing to solar projects; the energy source is projected to attract more investment than all other power generation sources combined in 2024, including fossil fuels. The rise of renewables like solar has also sparked more investment in energy storage and grid capacity worldwide. Battery storage is expected to exceed $50 billion in investments this year, more than double what was spent in 2022.
While the record-high investment is a promising sign for the future of clean energy, there is one major caveat: Spending is not distributed equally. Most investment is happening in China, the United States, and the European Union; developing economies outside of China make up only 15% of this spending.
This is something that needs to change in order to transition the world away from fossil fuels fast enough to meet global climate goals. Total investment in clean energy needs to not only double by 2030 to meet COP28 goals — it needs to quadruple in developing economies outside of China. This year, the report predicts, clean energy investments outside of China will more than double, compared to just four years ago, reaching nearly $320 billion.
In other words, it’s not enough for the big spenders to keep breaking records by investing in their own countries alone.
