Climate change technology has the potential to be a safe investment in an uncertain macroeconomic environment, and has received more attention than ever before.
PitchBook predicts that the climate tech sector will be a $1.4 trillion market within the next five years. This represents a compound annual growth rate of 8.8% for climate technology. – enough to make any self-respecting investor raise an eyebrow.
Renewable energy is emerging as a clear winner for 2022 and beyond. Russia’s invasion of Ukraine triggered an energy price crisis and highlighted the urgency of a clean energy transition not only for the environment, but also for economic and political stability. Interest in wind, solar and large battery technology has never been greater.
According to an International Energy Agency (IEA) report, total energy bills paid by global consumers are expected to exceed $10 trillion, a record price.
According to the World Economic Forum, investment in clean energy will accelerate significantly and is expected to exceed $1.4 trillion by 2022. Three-quarters of the overall growth in energy investment will come from clean energy, which has grown at a CAGR of 12% since 2020.
The EU has installed 47% more solar PV in 2022 than in 2021. This is enough to power 12.4 million homes, and Euronews reports that the block’s solar capacity has increased by 25% overall in 2022.
Meanwhile, in the United States, demand for residential solar energy is growing at a record pace as households shift to homegrown solar power as retail electricity prices rise.
European governments are finally accelerating the speed at which the EU grants permits to renewable energy projects, playing a role in supporting the energy transition in meaningful ways. In addition, the European Commission is proposing countries to set aside land or sea areas for renewable energy with a low environmental impact for projects.
Germany approves plans for states to allocate minimum land for onshore wind farms, EU energy minister backs law with target of 40% of energy coming from renewable sources by 2030 Did.
In the United States, the Inflation Reduction Act (IRA) provides additional benefits for renewable energy, extending tax credits through 2032 and providing long-term support for developers to undertake new, large-scale renewable projects. I was. Deloitte’s Renewable Energy Outlook for 2023 report predicts that this will add up to 550 gigawatts of clean energy by the end of the 2020s.
U.S. private investment in renewable energy will hit a record $10 billion in 2022. Investors are drawn to the IRA’s transparent and predictable returns from mature technology backed by his 10-year tax, so the level of investment Deloitte projects he expects to continue in 2023. credit.
A booming renewable energy sector could meet supply chain constraints in 2023. This can extend project timelines and hinder growth until supply chain capacity is increased to meet demand.
It is no exaggeration to say that the energy transition is in full swing. And this is a transition that will permanently change geopolitical dynamics, with the potential to bring countries self-reliance and stronger and more secure economies no longer dependent on fossil fuels.