Cleantech energy supply spending is projected to reach $670 billion in 2025, surpassing fossil fuel investments for the first time and solar PV will account for half of all cleantech investments and two-thirds of installed megawatts, according to the latest report by S&P Global Commodity Insights titled 'Top Clean Energy Technology Trends of 2025: Transformative Changes Ahead.'

"This milestone is driven by a significant increase in solar energy capacity, which is expected to exceed that of gas and potentially coal, with at least 620 GW of new solar and wind capacity coming online in 2024 — equivalent to the entire power systems of India, Pakistan and Bangladesh combined," says the report.

Global energy investment will exceed $3 trillion for the first time in 2024, with $2 trillion going to clean energy technologies and infrastructure, as spending on renewable power, grids and storage is now higher than total spending on oil, gas, and coal, the International Energy Agency (IEA) had said in June last year. The IEA estimates energy efficiency and end-use investments will be $669 billion, $771 billion in renewable power, $80 billion in nuclear and other clean fuels, $31 billion in clean emission fuels and another $452 billion in grids and storage in 2025. In 2024, fossil fuel investments were $1,116 billion, compared to $1,090 billion in 2023.

S&P states that the ongoing antidumping investigation in the US into cell exports from four Southeast Asian countries, which announced high preliminary tariffs on November 29, 2024, for exports from all four countries, has the potential to significantly reshape the global PV manufacturing landscape. In response, India is aggressively ramping up its PV manufacturing capacity, targeting exports to the US market to take advantage of the trade tensions between the US and China. This investigation has also spurred a wave of capacity announcements across the Middle East and North Africa region, particularly in Saudi Arabia, positioning it as a new hub for Chinese PV and battery manufacturers.

Pivotal shifts in clean energy

The report says that there will be pivotal shifts in the clean energy sector. The oversupply of cleantech equipment from China continues to influence international markets, with implications for pricing dynamics and manufacturing growth. Additionally, battery energy storage systems (BESS) will surpass pumped hydro storage in installed capacity. Battery energy storage is becoming essential for improving project economics, especially in regions with high renewable penetration. Long-duration energy storage systems are anticipated to double in installations by 2025.

Another trend will be use of AI applications in renewable generation forecasting and grid planning, which are gaining traction, enhancing energy management and integrating renewable sources into the grid. Data centres are projected to source approximately 300 TWh of clean power annually by 2030, significantly increasing their contribution to corporate clean energy procurement. The report also notes that ammonia is emerging as a key player in low-carbon hydrogen production, and carbon capture, utilisation, and storage (CCUS) projects are expected to grow substantially in 2025.

Policy changes matter

In recent years, government programs like the US Inflation Reduction Act and India’s production-linked incentive have promoted domestic clean energy technology production to create local jobs and enhance supply chain resilience. However, European policy initiatives to support cleantech manufacturing have been largely ineffective. The wind industry is an exception, as leading European turbine manufacturers maintain their legacy supply chains. Yet, facing cost pressures from cheaper Chinese competitors raises uncertainty about their future.

Some manufacturers have already consolidated European operations, shifting focus to new capacity in the Asia-Pacific region. Despite higher costs, these European supply chains remain a key differentiator for original equipment manufacturers amid growing scrutiny on localisation and supply chain resilience, potentially allowing them to persist and expand, particularly in the offshore wind sector, according to S&P.