The International Energy Agency (IEA) forecasts that global energy investments will reach a record $3.3 trillion in 2025, with $2.2 trillion directed toward clean technologies. Solar PV is expected to become the single largest component of global energy investment, as combined spending on utility-scale and rooftop solar is projected to hit $450 billion.
The 2% year-on-year (YoY) increase in capital flows to the energy sector this year will see $2.2 trillion going to renewables, nuclear, grids, storage, low-emission fuels, efficiency and electrification, while $1.1 trillion will collectively go to oil, natural gas and coal.
After the post-pandemic recovery and the initial shock of the Russian invasion of Ukraine, investment trends are now being shaped by the onset of the Age of Electricity, according to the IEA’s World Energy Investments 2025 report.
Driven by the growing demand for electricity across industries, cooling, electric mobility, artificial intelligence (AI), and data centers, capital flows into the electricity sector are expected to reach $1.5 trillion, 50% more than investments in oil, gas, and coal.
Solar PV has driven a near-doubling of the low-emissions power generation investment over the past 5 years. Fierce competition and ultra-low costs have made imported solar panels – often paired with batteries – a key investment catalyst in emerging markets. In early 2025, Chinese solar exports to developing countries surpassed those to advanced economies, with Pakistan alone importing 19 GW in 2024 – nearly half its grid-connected capacity.
Speaking of China, the country is the world’s single largest investor in energy, spending twice as much on energy as the European Union (EU) and almost as much as the EU and the US combined. Its share of the global clean energy spending rose from a quarter to almost 1/3rd, focused mostly on solar, wind, hydropower, nuclear, batteries and EVs.
Nevertheless, China also continues its investments in fossil fuels. In 2024, the country greenlit almost 100 GW of new coal-fired plants.
Despite progress, the IEA warns that grid investments – currently at $400 billion per year – are falling behind. Permitting delays and supply chain constraints for transformers and cables are key obstacles in its path. Grid investments need to be on par with those in generation and electrification.
The report also flags the stark disparity in global energy investment, with Africa accounting for just 2% of clean energy investments. The IEA calls for a significant scale-up in international public finance to bridge the gap for emerging and developing economies.
The complete IEA report, which is the 10th edition of this flagship report of the agency, is available for free download on the IEA’s website.
