INVESTMENTS in renewable energy (RE) could climb to a cumulative $11 trillion by 2040, mostly in emerging markets, a study by the International Finance Corp. (IFC) showed.
Reforms in RE auctions, land titles, and supportive energy storage policy frameworks will make this possible, the IFC, a member of the World Bank Group, said on Monday.
“There is a $6 trillion in new investment potential in wind and solar power between now and 2040; half of this potential is in the Asia-Pacific region,” the study said.
Also, last year, 75 gigawatts (GW) of solar photovoltaic cells were built worldwide, tantamount to 31,000 panels installed every hour.
More than 160 GW of renewable capacity was constructed around the world, accounting for $280 billion investment, double what fossil fuels received.
China and India lead the development, accounting for almost 50 percent of new global capacity.
Based on data from Bloomberg New Energy Finance, China added 34.5 GW of solar power while India added 4.1 GW. Similarly, the two countries added 23.4 GW and 3.6 GW of wind power, respectively, last year.
Investments in off-grid solar and energy storage could hit $23 billion a year by 2025, provided that countries used differentiated tariffs, clear technical and safety standards, and targeted financial incentives while backing new business models for community-based solar and finance solutions.
IFC is the largest global development institution focused on the private sector in emerging markets.
Since 2005, the institution has invested $18.3 billion of its own funds in long-term funding for climate-smart projects and mobilized an additional $11 billion from other investors.