Solar and China lead way as global renewable investments hit record $A557 billion

Global investments in renewable energy have skyrocketed in the first half of the year, rising by 22% to hit $US358 billion (around $A557 billion), an all-time high for any six-month period.

Energy analysts at BloombergNEF (BNEF) published their latest Renewable Energy Investment Tracker which notes the 22% rise on the first half of 2022. The gain was driven by a big increase in solar investment, which offset a decline in wind energy.

BNEF reiterates, however, that investment is still well short of a path towards net-zero and needs to increase by 76% to align with a net-zero pathway.

China remains the largest market for renewable energy investment across the first six months of the year, securing $US177 billion, up 16% from the same period a year earlier.

Solar remains the dominant renewable energy technology and the “key driver” of growth over the first half of the year.

A total of $US239 billion was invested in large- and small-scale solar systems, accounting for two-thirds of total global renewable energy investments over the period, representing a “staggering” 43% increase compared to the first half of 2022.

China accounted for approximately half of all large- and small-scale solar investment during the first six months of the year. The United States was well behind in second place, with $US25.5 billion invested, though this was nevertheless an all-time record, representing a 75% increase from the same period a year earlier.

This record for the US highlights continued easing of supply chain constraints and the hugely successful impact of the renewable energy incentives central to the country’s Inflation Reduction Act (IRA).

The wind energy industry saw investment drop by 8% to $US94 billion, with onshore wind dropped 21 per cent to $US64.5 billion as it faces a number of headwinds.

“Grid constraints, permitting challenges and faltering policy support in multiple markets are leading to a reduced global pipeline of ready-to-develop projects, which in turn is denting asset financing volumes,” BNEF explains.

The offshore wind energy industry however posted a strong 47% increase in investment compared to the first six months of 2022, with investment reaching $US29.2 billion. Europe accounted for the majority of the offshore wind investment growth, investing $US9.4 billion more in 1H 2023 than in 1H 2022.