Global investments in the solar energy sector touched the $308 billion mark in 2022, registering a massive increase of 36% over 2021 levels. Still, solar accounted for only 11.5% of the overall energy investment in 2022 ($2.6 trillion), according to the Solar Investment Report released by the International Solar Alliance (ISA) at its sixth assembly in New Delhi.
The report stated that solar investments are overwhelmingly concentrated in a few developed countries in the Asia Pacific Region, followed by Europe and North America. In 2022, Asia Pacific and Europe and North America accounted for 55% and 33% of global solar project development investment, respectively. Within these regions, investments have been dominated by economies that have a mature solar PV market, such as China, the United States of America (USA), Japan, Spain, Australia, the Netherlands, South Korea, Brazil, Vietnam, Germany, and India.
China and USA have been consistently attracting the most annual solar investments, with their combined share of about 50% of all solar investments since 2015. Only a small fraction of global investments in the solar sector is being made in emerging and developing economies such as the Middle East and Africa, Latin America, and the Caribbean. Thus, these regions are lagging behind in the race of solar energy deployment.
The report states that to accelerate global investments in solar energy, it is vital to prioritize these developing and underdeveloped regions across the world that have a huge unrealized solar potential.
Solar project development accounted for nearly 90% of the total investments made across the solar value chain in 2022. Segment wise, utility-scale solar segment accounted for the highest investments in solar project deployment with a share of 43% followed by residential solar segment at 39% and commercial & industrial (C&I) solar segment at 18% in 2022.
Private finance was a major contributor to solar energy projects, accounting for more than 80% of total investments between 2015 and 2022. The public sector contributed to the remaining investments during the same period.
The report states that for ensuring just energy transition and inclusion, more finance needs to be mobilized from public players as most of the private financing is directed towards advanced economies.
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