Investments in Renewable Energy Sector Could Hit $11T By 2040

India and China lead the development in renewable energy investments, accounting for almost 50 percent of new global capacity.

Investments in renewable energy (RE) could climb to a cumulative $11 trillion by 2040, mostly in emerging markets, according to a study by the International Finance Corporation, a member of the World Bank Group.

Major reforms in renewable energy auctions, land titles, and supportive energy storage policy frameworks will make this possible, the IFC study said.

“There is a $6 trillion in new investment potential in wind and solar power between now and 2040; half of this potential is in the Asia-Pacific region,” the study said.

The study also stated in 2016, 75 GW of solar photovoltaic cells were built worldwide, equivalent to 31,000 panels installed every hour.

Over 160 GW of renewable capacity was constructed around the world, accounting for $280 billion investment, double what fossil fuels received.

China and India lead the development, accounting for almost 50 percent of new global capacity. China added 34.5 GW of solar power while India added 4.1 GW, according to the data by Bloomberg New Energy Finance. Moreover, the two countries have also added 23.4 GW and 3.6 GW of wind power, respectively, last year.

The IFC study further states, investments in off-grid solar and energy storage could hit $23 billion a year by 2025, provided that countries used differentiated tariffs, clear technical and safety standards, and targeted financial incentives while backing new business models for community-based solar and finance solutions.

International Finance Corporation is the largest global development institution focused on the private sector in emerging markets. Since 2005, the institution has invested $18.3 billion of its own funds in long-term funding for climate-smart projects and mobilized an additional $11 billion from other investors.