Clean energy technology is set to surpass investments in upstream oil and gas for the first time in 2025 while solar PV will account for half of all cleantech investments and two-thirds of installed megawatts, according to the S&P Global.
This milestone is driven by a significant increase in solar energy capacity, which is expected to exceed that of gas and potentially coal, with at least 620 GW of new solar and wind capacity coming online in 2024 — equivalent to the entire power systems of India, Pakistan and Bangladesh combined, according to the commodity insights report.
Additionally, battery energy storage systems (BESS) will surpass pumped hydro storage in installed capacity.
“This massive build-out will require an estimated $640 billion, matching the projected spending on upstream oil and gas, including LNG liquefaction and pipelines. Overall, cleantech energy supply spending—encompassing renewable power generation, green hydrogen production and carbon capture and storage (CCS) — is expected to reach $670 billion in 2025,” it said.
This shift represents a geographical pivot from hydrocarbon-producing nations to regions with rapidly growing power demand and a transition from centralised energy projects to more distributed investments.
Approximately one-third of cleantech spending will focus on distributed solar installations under 5MW and behind-the-meter energy storage. However, this total investment still falls short of the levels needed to meet climate goals, particularly the goal of tripling renewable capacity by 2030.
Moreover, capital efficiency varies by region, with China projected to add nearly twice as many gigawatts per dollar spent compared with the United States. This trend underscores the evolving dynamics of the energy market as it shifts toward sustainable solutions.
However, projections indicate that China’s share of the battery cell manufacturing market will decline to 61% by 2030.
“The ongoing antidumping investigation in the US into cell exports from four Southeast Asian countries, which announced high preliminary tariffs on Nov. 29, 2024, for exports from all four countries, has the potential to significantly reshape the global PV manufacturing landscape. In response, India is aggressively ramping up its PV manufacturing capacity, targeting exports to the US market to take advantage of the trade tensions between the US and China,” it further said.