A new analysis from the International Energy Agency reported that total global investments in electricity in 2025 will be approximately 50% more than investments in dirty energy sources, such as oil and coal, with analysts expecting investments in electricity to reach USD 1.5 trillion in 2025.
It's a sharp swing, considering that just a decade ago, investments in dirty energy were 30% higher than those in electricity.
According to the analysis, reported by Marketplace, U.S. energy investments are moving toward electricity from low-pollution sources. Global spending on low-pollution power sources has nearly doubled in the past five years, and the IEA analysis estimates that solar investment in 2025 will reach around $450 billion USD.
While the reasons for shifting toward electricity vary, they include the numerous new data center constructions, grid strains during heat waves, and the growing use of heat pumps and electric vehicles. With all this demand for electricity, the supply needs to be increased.
As Ed Hirs, a professor of energy economics at the University of Houston, told Marketplace about the current demand and supply needs, "We have more people coming to the party than we have places set."
The analysis is good news for the world, not only because investing in cleaner energy will lead to cleaner air and water, as well as healthier communities, but because clean energy and sustainability-focused investments have proven to be financially smart. Investments in clean, renewable energy typically outperform those in dirty energy when it comes to long-term growth.
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Countries' investments in cleaner energy also often result in increased job creation and economic resilience, which are a boon for local communities in need of these things.
While there have been ups and downs in the journey of the clean economy thus far, the long-term momentum of this sector is strong and backed by economic logic. Despite its ups and downs, however, the world continues to move towards a cleaner economy, which will not only help cool our planet but also lead to massive growth and investment opportunities for individual investors and the U.S. as a whole.
For now, though, the increased investments in electricity and renewable energy this year will help supply meet demand.
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