Fossil fuels and solar energy investment

Renewable energy has existed for some time, but until recently, fossil fuels were the dominant method of powering our world. Over the last few years, however, investments in the generation of clean energy have started overtaking fossil fuels. In 2017, renewables supplied 12% of global power — the highest percentage ever. Data from 2017 showed that despite various changes in the electric sector, investments in renewables are still leading the way toward the energy system of the future.

Power Generation

Investments in oil and gas increased slightly, but investments in power generation for fossil fuels lagged behind that of renewables in most parts of the world.
In 2017, investment in solar PV hit record levels, largely thanks to continued investments in China and India; In fact, 2017 was the first time India’s investments in renewables exceeded its investments in fossil fuel generation. Solar attracted $160.8 billion in investment or 18% more than in 2016. The same year approximately four gigawatts of offshore wind was ordered, mostly in Europe. However, investments in onshore wind decreased by around 15% and hydropower investments fell to their lowest level in a decade.

Energy Supply

Clean energy, however, still makes up a relatively small portion of spending in sectors other than electricity generation. Transportation, heating, and cooling still use large amounts of fossil fuels. Fossil fuels as a percentage of total energy supply investment rose to 59% in 2017. According to the IEA, however, the fossil fuel portion of energy supply investment may decrease over the long term. Under the IEA's Sustainable Development Scenario, it would fall to 40% by 2030. Even though investments in oil and gas supply grew last year, electricity got the most investment of any energy sector. The IEA noted in its report that this demonstrates the increasing electrification of the global economy; Renewables support this electrification much more than fossil fuels or nuclear power.

Overall investment trends in favor of solar and wind power

Overall global investment in energy dropped for the third year in a row but last year, it fell by $1.8 trillion, or 2%. Most of the decrease came from power generation due to lower amounts of new coal, nuclear, and hydro capacity. Investments in these energy sources declined, but clean energy still led the way in many areas as countries around the world continued to push for less pollution. China remained more influential in the area of energy investments and received one-fifth of the global total of energy investments, the most of any country. China is increasingly moving toward low-carbon energy. It decreased its investments in coal-fired plants by 55% last year. The United States was the second-largest investor while Europe was responsible for about 15% of global investment in energy. Its investments were especially concentrated in energy efficiency and renewables. Renewables may help the energy sector continue to meet energy demands even as it reduces investments in new fossil fuel generation. Energy efficiency may play a similar role. Investments saw a substantial increase this past year, garnering $236 billion in the areas of transport, buildings, and industry.

There has never been a better time to install a solar energy system!

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