The world is finally spending more on solar than oil production
The International Energy Agency just published its annual report on global investment in energy, where it tallies up all that cash. The world saw about $2.8 trillion of investments in energy in 2022, with about $1.7 trillion of that going into clean energy.
That’s the biggest single-year investment in clean energy ever, and where it’s all going is pretty interesting. I have some good news, some bad news, and a couple of surprising tidbits to share. So grab some popcorn and let’s dive into the data.
Fossil fuels are faltering
Let’s start with what I consider to be good news: there’s a lot of money going into clean energy—including renewables, nuclear, and things that help cut emissions, like EVs and heat pumps. And not only is it a lot of money, but it’s more than the amount going toward fossil fuels. In 2022, for every dollar spent on fossil fuels, $1.70 went to clean energy. Just five years ago, it was dead even.
Clean energy’s growing dominance is especially clear when it comes to solar power. In 2023, for the first time, investment in solar energy is expected to beat out investment in oil production. It’s a stark difference from what the picture looked like a decade ago, when oil spending outpaced solar spending by nearly six to one.
While we’re on oil and gas, I think it’s worth pointing out one really interesting point: while there’s a lot of money flowing to clean energy, it doesn’t make up a big share of spending by fossil-fuel companies.
See those tiny dark slivers in 2021 and 2022? That’s the share of oil and gas companies’ spending that went toward clean energy. Spending on oil infrastructure has fallen (which is what’s allowed solar to catch up), but companies are making up for it by paying out dividends, buying back stock, and paying back debt rather than putting more into low-emissions tech.
Any investment and attention going to renewables and innovations that could help cut emissions is great, and I do think oil and gas companies can play a role in boosting new technologies, especially those where they have expertise (I’m looking at you, geothermal!). But I think it’s important to keep that spending in context—oil and gas companies are putting less money into renewables than ad campaigns would have you think.
Bring it on
Within clean energy, the vast majority of spending is going into renewables like wind and solar, grid upgrades, and efforts to improve energy efficiency.
