US$239bn! Global Solar Investment Breaks Record

Global solar investment rose 43 per cent year-on-year to $239 billion in the first half of 2023, but renewable energy investment is still well below the amount of investment needed to meet net-zero targets by 2050.

According to BloombergNEF's H2 2023 Renewable Energy Investment Tracker, investment in large and small solar systems totalled $239 billion, accounting for two-thirds of total global renewable energy investment in the first half of the year.

China remains the largest solar investor, accounting for about half of all large- and small-scale solar investments in the first half of 2023. Reasons for this dominance include falling module prices, a strong rooftop PV market, and the commissioning of China's energy megabases, which are large-scale wind and solar power plants developed mainly in desert areas.

Right behind it, the US is the second largest solar investor, with $25.5bn invested in the first half of 2023 in both large- and small-scale solar. Although much lower than China, investment in the US is already up 75 per cent from H1 2022 as supply chain restrictions ease and the Inflation Reduction Act (IRA) becomes clearer.

In addition, Germany, Poland and the Netherlands have seen record investment, with the Russian-Ukrainian conflict and subsequent European energy crisis driving demand in these countries. Saudi Arabia also saw impressive growth due to NEOM PV plants dedicated to hydrogen production.

In the first half of 2023, global new investment in renewable energy, excluding solar, surged to $358 billion, up 22 per cent year-on-year and at an all-time high for all six-month periods. Of this, $335 billion was spent on project development through asset finance and small-scale solar construction, up 14 per cent year-on-year.

In addition, venture capital and private equity commitments to renewable energy companies for expansion reached $10.4 billion in the first half of 2023, up 25 per cent year-on-year. The total amount of new capital raised on the open market reached $12.7 billion in the first half of the year, up 25 per cent year-on-year.

However, the record level of investment in the first half of 2023 is still below the amount of investment needed to keep global warming below 2°C by 2050. According to BloombergNEF's New Energy Outlook, the world needs to spend $8.3 trillion from 2023 to 2030 to deploy renewable energy.

As a result, $590bn should be invested in asset finance and small-scale solar over a six-month period, meaning that investment in the first half of 2023 would still need to grow by 76% to reach the required amount.