IEA Forecasts Solar PV Investment To Exceed USD 500 Bn In 2024

US DOE To Invest $9.5 Million In Four Solar Projects

The International Energy Agency’s (IEA) recent report on world energy investment found that investment in solar PV surpassed all other generation technologies combined. It found a noticeable rise in solar panel costs that have decreased by 30% over the last two years.

International Energy Agency (IEA) report said, “The prices for minerals and metals which are crucial for energy transitions especially required for batteries dropped sharply. In this process prices for metals and minerals are crucial for energy transitions which have also sharply dropped, especially those used for batteries.”

The IEA report projected that the power sector investment in solar photovoltaic (PV) technology can exceed USD 500 billion in 2024, surpassing all other generation sources combined. The study found, “Though growth may moderate slightly in 2024 due to falling PV module prices, solar remains central to the power sector’s transformation. In 2023, each dollar invested in wind and solar PV yielded 2.5 times more energy output than a dollar spent on the same technologies a decade prior.”

Solar Leads In Renewable Energy Technology Investments

The research showed that “Though growth may moderate slightly in 2024 due to falling PV module prices, solar remains central to the power sector’s transformation. In 2023, each dollar invested in wind and solar PV yielded 2.5 times more energy output than a dollar spent on the same technologies a decade prior.”

The report compared and found, “In 2015, the ratio of clean power to unabated fossil fuel power investments was roughly 2:1. It further elaborated that In 2024, this ratio is set to reach 10:1. The rise in solar and wind deployment has driven wholesale prices down in some countries, occasionally below zero, particularly during peak periods of wind and solar generation. This lowers the potential for spot market earnings for producers and highlights the need for complementary investments in flexibility and storage capacity.”

World Invests twice as much in clean energy as much as it does in fossil fuel

The research associated the rise in clean energy spending with emissions reduction goals, especially focused on technological gains, and energy security (particularly in the European Union). The report associated new industrial strategies deployment with clean energy manufacturing to establish a stronger market position.

In the United States, investment in clean energy investment is expected to increase to more than USD 300 billion in 2024. This is 1.6 times the 2020 level and well ahead of the amount invested in fossil fuels. The European Union (EU) spends USD 370 billion on clean energy today. At the same time, China is set to spend almost USD 680 billion in 2024, supported by its large domestic market and rapid growth in the so-called “new three” industries: solar cells, lithium battery production, and EV manufacturing.

The study reported growth in renewable power investment in EMDE outside China due to significant spending in India, Southeast Asia, Brazil, and Africa, thanks to policy reforms and the introduction of well-organized public tenders, as well as grid improvements. The study showed that the volume of renewable energy capacity that was auctioned in India, for example, topped 20 gigawatts (GW) in 2023 which is more than double that of 2022. It elaborated that these investments are particularly focused on solar PV and projects that combine renewables with storage. South Africa also concluded its first battery procurement program and is seeking to add 5 GW of renewables and 600 megawatts (MW) of battery storage.
India
The study also showed that in India, towards a major imbalances in investment, and Emerging Market and Developing Economies (EMDE) outside China account for only around 15% of global clean energy spending.

The report indicated a tentative sign of a pick-up in investments which are set to approach USD 320 billion in 2024, up by more than 50% since 2020. This is similar to the growth seen in other advanced economies which have reportedly seen a (+50%) increase, although trailing China (+75%). The gains primarily come from higher investments in renewable power, now representing half of all power sector investments in these economies.

The report found progress in India, Brazil, parts of Southeast Asia and Africa to be associated with new policy initiatives, well-managed public tenders, and improved grid infrastructure. Africa’s clean energy investments in 2024, at over USD 40 billion, are nearly double those in 2020.

The study showed an increase in the volume of renewable energy capacity auctioned in India. It gave the example, of India which topped 20 gigawatts (GW) in 2023 – more than double that of 2022 – with a particular focus on solar PV and projects that combine renewables with storage.

The report assessed and found that “On the manufacturing side, 2023 was dominated by significant price declines and concerns about overcapacity. As Chinse manufacturing capacity continues to grow, listed solar firms dominated by Chinese entities are starting to see their profit margins shrink.”

The study showed, “Despite government support for domestic manufacturing, cost pressures have led to some cancellations of expansion plans – and in some cases, existing plant closures – in Europe, the United States and India. On the contrary, falling prices for solar modules led to a 5% drop in the global average levelized cost of electricity (LCOE) for solar PV last year.”