The IEA defines clean technologies as renewables, electric vehicles (EVs), solar energy (photovoltaics), nuclear power, electrical grids, energy storage, low-emission fuels, energy efficiency improvements, and heat pumps. Conversely, fossil fuels are defined as coal, natural gas, and oil.

Annual clean energy investment is expected to increase by 24% between 2021 and 2023, driven primarily by renewables—such as solar installations—and electric vehicles. In contrast, fossil fuel investment rose by only 15% during the same period.

Notably, investment in solar energy is set to surpass oil production investment for the first time. Spending on solar power in 2023 is anticipated to reach $382 billion, exceeding the $371 billion projected for oil production.

Dave Jones, Head of Data Insights at the Ember think tank, stated:

“Solar is becoming a true energy superpower. It is emerging as the most significant tool at our disposal for rapid decarbonization across all economic sectors.”

Several factors are stimulating clean energy investment, including periods of robust economic growth and the geopolitical impact of Russia’s invasion of Ukraine. The latter caused extreme volatility in fossil fuel prices, prompting European nations to transition to clean energy to bolster energy security. Policy support, such as the U.S. Inflation Reduction Act (IRA) and similar initiatives in Europe, China, and other regions, has acted as a major catalyst.

However, fossil fuel investment must decline more rapidly. Energy companies must be held accountable for environmental degradation. Currently, the oil and gas industry’s investment in alternative low-emission technologies accounted for less than 5% of their total upstream investment in 2022. Furthermore, developing nations require additional support to facilitate their transition to clean energy.