This year, the International Energy Agency (IEA) reported a record-breaking investment of $1.7 trillion in clean energy technologies such as wind, solar power, electric vehicles, and batteries — far surpassing the $1 trillion spent on fossil fuels. These investments are leading to rapid growth in the industry, with China alone doubling its capacity in clean energy by 2025, five years ahead of schedule. In Britain, wind, solar, and hydropower now account for one-third of electricity generation. The US is expected to generate 23% of its electricity from renewable sources in 2023, a 10% increase from a decade prior.
This exponential growth in clean energy is largely due to its dramatic reduction in cost. Since 2009, the cost of solar power has dropped by 83%, while the cost of producing wind power has decreased by more than half. Meanwhile, the cost of lithium-ion battery cells has decreased by 97% over the last three decades. This has made solar and wind power the least expensive sources of new electricity in many markets, and they currently account for 12% of global electricity production.
The rapid price drops have been driven by both technological advances and an influx of funds. In the US, President Biden’s first two years in office saw the passing of three laws that earmarked unprecedented funds for clean energy. This has led to $230 billion in manufacturing investments, and the US solar industry installed a record 6.1 gigawatts of capacity in Q1 of 2023, a 47% increase from the same period last year. As a result, many of the country’s biggest corporations such as Alphabet, Amazon, and General Motors are purchasing large amounts of wind and solar power.
