The booming investment in global solar energy projects is not just a trend but an imperative driven by the urgent need to address the world’s energy needs sustainably. This investment surge clearly shows the rising investor confidence in clean energy. It also shows the world is getting serious about tackling climate change, which requires a rapid shift to zero-carbon power.
Solar PV currently provides 4.5 percent of global electricity, and with solar technology costs continuing to fall, the share of renewables in total energy supply is expected to increase nearly six times by 2050 – which is crucial if we are to keep temperatures below 2 degrees Celsius. To do that, we must invest at least $6 trillion in low-carbon power by 2050.
According to a report released by the International Energy Agency (IEA), renewables are set to attract more than $380 billion in investments this year, outpacing oil investment for the first time. Solar PV is attracting the most significant share of these funds, with battery storage and critical mineral mining also benefitting from the growing demand for clean technologies.
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Dr Ajay Mathur, Director General of the ISA, said that solar energy is proving to be the “common energy imperative” for governments to take action on climate change. At the curtain-raiser press conference for ISA’s sixth assembly, he added that the alliance is working with governments to help them better use solar energy through policies and regulations, sharing best practices, and mobilizing investments.
Mr Mathur pointed out that the alliance collaborates with multilateral development banks, development financial institutions, private and public sector organizations, civil society, and others to bring innovative instruments and strategies to countries needing them. It focuses on helping developing countries and Small Island Developing States achieve cost-effective and transformational solar energy solutions and building capacity in finance and project management.
He pointed out that the alliance has already made significant progress in policy, regulation, market development, and financing to support the deployment of solar energy. In the past year alone, ISA has secured over $1 billion in funding and mobilized $2.2 billion from investors to deliver on its ambitions.
He also highlighted the need to improve investment flow in remote areas. He cited that about 74 percent of investments go to large-scale projects in OECD and China, while Africa receives only two to three percent. He noted that the ISA is looking at ways to address this issue, including training and certifying people to assess loan applications for solar projects. ISA plans to develop an infrastructure to support the solar industry in developing countries and the Small Island Developing States. This will include setting up a Global Solar Bank offering loans and investment guarantees for renewable energy projects.