Bloomberg Philanthropies and the International Solar Alliance (ISA) have announced a partnership to mobilise $1 trillion in global investments for scaling up solar energy across ISA member countries.
The two organisations will work with the World Resources Institute (WRI) to develop a Solar Investment Action Agenda, which will launch at COP26 and a Solar Investment Roadmap for 2022.
Bloomberg NEF has released the Scaling up Solar in ISA Members Countries report, which will serve as the analytical backing for both the Action Agenda and Solar Investment Roadmap.
Michael R Bloomberg, UN Secretary General’s Special Envoy for Climate Ambition and solutions and Bloomberg LP & Bloomberg Philanthropies founder, said: “Global energy demand is rapidly rising, especially in developing countries and the price of solar power is rapidly falling – but there is not enough of it being deployed.
“Fixing that requires more collaboration across the public and private sectors, and more data to identify challenges and opportunities – and both will be central to this effort.”
He added: “By speeding up investment in solar power, this new partnership will help to curb the carbon emission that are heating the planet – while also spurring economic growth, creating jobs and reducing costs for the public.”
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Dr Ajay Mathur, director-general of the International Solar Alliance, explained: “ISA has a vital role to help establish the infrastructure for a zero-carbon emission future. With strong foundations already in place, our immediate focus is to identify and mobilise the opportunities and capital to accelerate our solarisation goals in the interim and long term.
“This partnership would help three different but interlinked objectives: promoting a clean energy transition; enabling energy access and energy security, and delivering a new economic driver for ISA member countries,” said Mathur.
Scaling up solar to enable energy access
Scaling Up Solar in ISA member countries finds that electricity demand is expected to triple in 75 less-developed ISA countries over the next 30 years, while the cost of utility-scale solar is expected to drop by almost 20% over the next five years.
These findings show that solar power is the most economically viable solution for adding new power generation capacity for more than half the world’s population.
To capitalise on the benefits of solar energy, lift people out of energy poverty and drive the transition to a lower-carbon economy trillions of dollars will have to be mobilised and the right policy frameworks need to be put into place.
Using the BNEF analysis, Bloomberg Philanthropies, ISA and WRI will collaborate to ensure ISA member countries and partners agree on the way to scale up investment and commit to catalysing $1 trillion towards solar energy by 2030.
The partnership wants to kickstart catalytic investment across ISA member countries through the Solar Investment Action Agenda. This Agenda proposes high-impact opportunities for rapidly scaling the delivery of financial mechanisms to meet solar technology needs in different countries.
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Ani Dasgupta, WRI CEO, said: “Solar energy will play an enormous role in the transition to a more sustainable future but it has to be equitable. Only 2% of solar investment is going into Africa, even though the continent has vast solar potential and a large number of people without electricity access.”
“We need to make solar investment real to the millions of people who have been left behind. This partnership will identify opportunities for the public and private sector to collaborate and scale solar investment to make this transition possible,” said Dasgupta.
Investment data roadmap to show the way
Following the release of the Action Agenda at COP26, a Solar Investment Roadmap will provide clear scaling goals and numbers for the global community to measure progress toward the investment goal of $1 trillion.
The BNEF analysis will serve as a foundation, with regional, sectoral and country-level information on key challenges in solar markets, both off and on-grid investments and for different solar applications, including decentralised grids and rooftop solar.
The Scaling Up Solar in ISA member countries report, released at the 4th International Solar Alliance Summit, finds that the COVID-19 pandemic reduced 2020 investment in solar projects by 44% below 2019 levels in developing countries. While levels seem to be rebounding in 2021, progress in improving electrification rates have slowed as developing country governments redirected energy access funding.
The report also found that financing for energy access startups fell about 24% to $440 million in 2020, compared to 2019.
Beyond the 80 ISA member nations, the report also includes outlooks for global solar capacity. Under BloombergNEF’s Economic Transition Scenario, which models future developments in the energy sector under the assumption that policymakers wouldn’t implement new major initiatives to address climate change, 1.6TW of global solar capacity will be installed by 2030. This would attract around $1.2 trillion in new investment. The current global solar capacity sits at 788GW.
Installed battery capacity added between now and 2030, under this particular scenario, would be 165GW, which would represent $151 billion in new investment. This projected build by the end of 2030 represents a need for about $1,5 trillion in investment.
The Scaling Up Solar in ISA member countries report is available online.