Chart: US smashes record for climatetech investment in 2023

Huge amounts of money, both public and private, are flowing into the U.S. energy transition. But growth needs to accelerate for the country to get on track to meet climate goals.
By Dan McCarthy

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Many rows of solar modules. A graphic overlay reads Chart of the Week.

Canary Media’s chart of the week translates crucial data about the clean energy transition into a visual format.

The U.S. energy transition has more money behind it than ever.

Last year, climatetech investment reached a total of $239 billion, a record-breaking figure that’s 38 percent higher than the 2022 total. The data comes from a new Clean Investment Monitor report that tracks actual investment — not announcements — from the public and private sectors.

Much of last year’s growth is due to the boom in domestic clean energy manufacturing sparked by the Inflation Reduction Act.

In 2022, the year the climate law passed, investment in U.S. clean energy manufacturing was around $19 billion. Last year, it totaled $49 billion. That’s a growth rate of 158 percent. The vast majority of this investment — $42 billion — poured into the domestic EV supply chain. Solar manufacturing was the next biggest recipient, with $5.1 billion, more than five times higher than what was spent in 2022.

Energy and industry investment — money flowing into the deployment of large-scale cleantech — also made a significant leap last year. It grew from $54 billion in 2022 to $73 billion in 2023. Utility-scale solar and storage dominated that category last year, attracting nearly two-thirds of this money. Meanwhile, investment in the beleaguered wind energy sector actually shrunk compared to 2022.

The retail category, defined as household and business purchases of decarbonization tech, remained by far the largest single bucket of clean energy investment last year. It jumped about 17 percent, from $101 billion to $118 billion, driven mostly by the growing appetite for EVs. Heat-pump investment was the laggard here, dragged down by a slow year for residential construction and HVAC installations in general.

Almost all of last year’s investment in climatetech came from private sources, which doled out more than $5 for every government dollar. That spending was heavily encouraged by the Biden administration’s Inflation Reduction Act and Bipartisan Infrastructure Law, which established lucrative tax incentives as well as grant and loan programs for all things clean energy.

Despite the positive investment trend, the U.S. is still not on track for its Paris Agreement goal of halving emissions by 2030 relative to 2005 levels, though emissions might have ticked down by a few percentage points last year.

Getting on the right trajectory will require a lot more manufacturing and deployment of clean energy technology — and that will, of course, require a lot more cash.