In Short : A recent report forecasts that clean energy investments will surpass oil and gas spending by 2025. This shift highlights the accelerating global transition towards renewable energy sources. The surge in funding for clean energy reflects growing commitments to address climate change and reduce dependence on fossil fuels, paving the way for a more sustainable energy future.
In Detail : Investments in clean energy technologies are poised to exceed spending on upstream oil and gas for the first time in 2025, according to the latest report by S&P Global Commodity Insights titled ‘Top Clean Energy Technology Trends of 2025: Transformative Changes Ahead.’ The report outlines a pivotal moment for the energy sector, with clean energy spending projected to reach USD 670 billion in 2025, surpassing fossil fuel investments.
A key driver of this transition is solar energy, which is set to account for half of all clean energy investments and two-thirds of installed megawatts. The solar industry is on track to expand dramatically, with more than 620 gigawatts (GW) of new solar and wind capacity expected to come online in 2024. This increase is equivalent to the entire power systems of India, Pakistan, and Bangladesh combined, positioning solar to potentially outpace both gas and coal energy sources.
Battery energy storage systems (BESS) are also set for significant growth, with projections indicating that BESS will surpass pumped hydro storage in installed capacity by 2025. The surge in demand for energy storage solutions is critical for regions with high renewable penetration, helping to stabilize grids and improve the economics of renewable projects. Long-duration energy storage systems, in particular, are expected to double their installations by 2025.
Artificial Intelligence (AI) applications in renewable energy generation forecasting and grid planning are gaining momentum, enabling better integration of renewables into the grid and enhancing energy management systems. Data centres, which are projected to source around 300 terawatt-hours (TWh) of clean energy annually by 2030, are becoming a significant player in the global clean energy transition, further boosting corporate clean energy procurement efforts.
Ammonia is emerging as a promising solution for low-carbon hydrogen production, while carbon capture, utilization, and storage (CCUS) projects are also expected to see substantial growth in 2025, with significant investments in reducing the carbon footprint of industries.
Despite these optimistic developments, the clean energy sector faces challenges. The report highlights the ongoing influence of China’s cleantech equipment oversupply on international markets, affecting pricing and manufacturing dynamics. While US policies like the Inflation Reduction Act and India’s production-linked incentive have supported domestic clean energy technology production, European policy initiatives have struggled to promote similar manufacturing growth. The wind industry is an exception, where European turbine manufacturers continue to maintain strong supply chains, although they face cost pressures from cheaper Chinese competitors.
The US’s ongoing antidumping investigation into Southeast Asian solar cell exports, which resulted in high preliminary tariffs in late 2024, could significantly reshape the global solar photovoltaic (PV) manufacturing landscape. In response, India is ramping up its PV manufacturing capacity, eyeing the US market as a key opportunity. Additionally, the Middle East and North Africa (MENA) region, particularly Saudi Arabia, is emerging as a new hub for Chinese PV and battery manufacturers, benefiting from the trade tensions between the US and China.
As the clean energy sector accelerates, these transformative trends are reshaping global energy markets, signalling the beginning of a new era where clean energy technologies dominate investments, laying the foundation for a more sustainable energy future.
