Solar Fabs Attracted $23.9 Billion Investment In 2022

• BloombergNEF's new report on energy transition investments counts $1.1 trillion to have been tipped in, in 2022
• Renewables led with $495 billion, followed by $466 billion in the electrified transport sector
• Clean energy factory investments totaled $78.7 billion in 2022, including solar PV manufacturing factories attracting $23.9 billion
• Manufacturing capacity for clean energy technologies is unlikely to be the major bottleneck to achieving net zero, but China still invests the maximum

Bloomberg New Energy Finance (BloombergNEF) believes with $1.1 trillion investment in low-carbon energy transition in 2022, including $23.9 billion for solar manufacturing factories, these technologies seem to have reached parity with capital deployed for fossil fuels for the 1^st time ever, yet more money needs to flow in here.

Add $274 billion tipped in for power grid, energy transition investment raised last year was $1.38 trillion, according to BloombergNEF's 2023 Energy Transition Investment Trends.

Analysts believe global investment in lower-carbon technologies remains 'woefully short' of what's needed to tackle climate change as it needs to triple 'immediately' for the world to be able to meet the net-zero target by 2050. Their expectation is an annual average of $4.55 trillion for the remainder of this decade.

According to the report writers, the momentum towards dealing with energy crisis and policy action is guiding investments into faster deployment of clean energy technologies. Global investments in 2022 increased 31% annually despite supply chain disruptions and macroeconomic headwinds.

"Investment in clean energy technologies is on the brink of overtaking fossil fuel investments, and won't look back. These investments will drive short-term job creation and help to address medium-term energy security objectives," said Head of Global Analysis at BloombergNEF, Albert Cheung. "But much more investment is needed to get on track for net zero in the long term."

Renewables attracted the largest investment, with a record $495 billion in 2022, up 17% from the previous year, according to the report. These were followed by $466 billion in the electrified transport sector.

Clean energy factory investments totaled $78.7 billion in 2022 having grown from $52.6 billion in 2021 with battery and related component manufacturing attracting $45.4 billion. Solar PV manufacturing factories attracted $23.9 billion. China accounted for 91% of manufacturing investments last year. The report only factors in successfully commissioned factory projects for the report.

Going forward, between 2023-26, analysts estimate factory investment for clean energy technologies to only average $35 billion annually to get on track for net zero scenario.

"Manufacturing capacity for clean energy technologies is unlikely to be the major bottleneck to achieving net zero," said BloombergNEF's Head of Trade and Supply Chains research, Antoine Vagneur-Jones. "However, from a supply chain diversification point of view, the picture has not changed much. China is investing by far the most in building out its clean energy supply chain, and it remains to be seen if other regions can capture significant market share."

Despite growing policy support and strong interest from the private sector, hydrogen managed to raise $1.1 billion or 0.1% of the $1.1 trillion.

The report also notes a 29% decline from the previous year in climate-tech corporate finance adding up to $119 billion, and not included into the $1.1 trillion investment.

Overall, China took the lion's share of $546 billion or nearly half of the global total for energy transition investment in 2022, followed by the US with $141 billion. The European Union (EU), if treated as a single bloc raised $180 billion.