Global Clean Energy Manufacturing Investment Soars 70%: Solar PV and Battery Capacities Near Net-Zero Goals – Report

A report from the International Energy Agency (IEA) reveals that global manufacturing capacity for solar photovoltaic (PV) technology is already sufficient for the needs of this decade if we aim for net-zero emissions. Battery manufacturing is nearly at the required level, showing significant progress in clean energy technology production.

The report, titled Advancing Clean Technology Manufacturing, highlights a major surge in investments in clean energy technologies. In 2023, global spending on manufacturing key clean energy technologies—including solar PV, wind turbines, batteries, electrolyzers, and heat pumps—hit USD 200 billion. This represents a more than 70% increase from 2022 and contributed around 4% to global GDP growth.

Investment in solar PV manufacturing more than doubled last year, while battery manufacturing investment increased by about 60%. As a result, the manufacturing capacity for solar PV modules now meets the projected needs for 2030 according to the IEA’s net-zero scenario. For batteries, announced projects are expected to bring manufacturing capacity to 90% of what will be required by the end of this decade.

Many new clean energy manufacturing projects are expected to start operations soon. In 2023, approximately 40% of investments were in facilities set to open in 2024. For batteries, this figure rises to 70%. This rapid expansion is expected to significantly boost clean energy transitions globally.

IEA Executive Director Fatih Birol noted that record production from solar PV and battery plants is driving the shift to clean energy. He emphasized that while more investment is needed for certain technologies and a wider geographical spread in manufacturing, the current trends are promising. Policymakers have a significant opportunity to craft industrial strategies that focus on clean energy transitions.

Currently, clean energy manufacturing is concentrated in a few regions. China dominates with more than 80% of the world’s solar PV module manufacturing capacity. However, the report suggests that battery cell production might become more geographically diverse by 2030. If all planned projects come to fruition, Europe and the United States could each account for about 15% of global battery manufacturing capacity by the end of the decade.

The report also provides insights into production costs. China remains the lowest-cost producer of clean energy technologies. For example, building battery, wind, and solar PV manufacturing facilities in India is typically 20% to 30% more expensive than in China, and 70% to 130% more costly in the United States and Europe. However, the majority of production costs (70% to 98%) are linked to operational expenses such as energy, labor, and materials. This indicates that cost differences are not fixed and can be influenced by policy changes.

The report was created in response to a request from G7 Leaders in 2023 and offers guidance for policymakers as they develop industrial strategies centered around clean energy manufacturing. It emphasizes that while there is no universal approach, the principles outlined can help shape effective future planning in this critical area.