The report highlighted a significant concentration of investments in a handful of developed nations primarily in the Asia Pacific Region, followed closely by Europe and North America.
In a recent report unveiled during its sixth assembly in New Delhi, the International Solar Alliance revealed that global investments in the solar energy sector soared to an impressive $308 billion in 2022, marking a substantial 36% surge from the previous year.
Despite this remarkable growth, solar energy accounted for just 11.5% of the total energy investment in 2022, which amounted to $2.6 trillion.
The report highlighted a significant concentration of investments in a handful of developed nations primarily in the Asia Pacific Region, followed closely by Europe and North America.
In 2022, these regions commanded 55% and 33% of the global solar project development investment, respectively. Notably, mature photovoltaic (PV) markets in economies like China, the United States, Japan, Spain, Australia, the Netherlands, South Korea, Brazil, Vietnam, Germany, and India dominated these investments.
Consistently, China and the United States have been the leading recipients of annual solar investments, jointly accounting for approximately 50% of all investments since 2015. However, emerging and developing regions such as the Middle East and Africa, Latin America, and the Caribbean received only a fraction of the global investments in the solar sector, lagging behind in solar energy adoption.
The report emphasized the critical need to prioritize these underdeveloped and developing regions worldwide, which hold immense untapped solar potential, in order to expedite global investments in solar energy.
Solar project development played a pivotal role, making up nearly 90% of the total investments across the solar value chain in 2022. Breaking it down by segment, the utility-scale solar segment claimed the largest share of investments in solar project deployment at 43%, followed by the residential solar segment at 39%, and the commercial & industrial (C&I) solar segment at 18% in 2022.
Private financing emerged as a major driver, contributing over 80% of the total investments from 2015 to 2022 for solar energy projects. Meanwhile, the public sector played a complementary role in the remaining investments during the same period.
To ensure a just energy transition and foster inclusivity, the report underscored the necessity of mobilizing more finances from public entities, as a significant portion of private funding is directed towards advanced economies.