Investment flows today determine where electricity comes from tomorrow. Increasingly, the money is flowing to renewable energy technologies. In 2019, the world financed $282 billion of renewable capacity, with onshore and offshore wind leading the way at $138 billion followed by solar at $131 billion. The success is attributable to maturing technologies and falling costs.
The costs of solar and wind power have dropped 85% and 49% respectively from a decade ago. That means it’s now possible to turn profits on the energy sources that can help lower greenhouse-gas emissions, and investors are piling in. Renewable energy drew more than $2.6 trillion in investment from 2010 to 2019. Building new wind or solar capacity now costs less than adding the equivalent in coal or gas plants in two-thirds of the world. Investment has pushed solar energy to more than 8% of global generating capacity, and wind to almost 9%.
The annual investment tally is compiled by BloombergNEF, which collects data on the global clean-energy economy, including all renewable deals larger than one megawatt. Results are also published in an UN Environment Programme report, with assistance from the Frankfurt School of Finance and Management.
The chart above is exactly what progress looks like. Renewable investment already dwarfs the estimated $100 billion of new finance for coal and gas power in 2019. By the end of 2020, according to BNEF research, there should be more than 2,600 gigawatts of installed solar, wind, hydro and geothermal power. That’s 38% of the global total. Expect continued investment to drive that number to more than 55% by 2030 and 74% by 2050.