Solar Innovation Gains Momentum as IEA Identifies 150+ Energy Breakthroughs and Rising Strategic Focus on Storage and Supply Chains

The global energy innovation landscape is entering a new phase shaped by energy security, industrial competitiveness and infrastructure resilience, according to the latest State of Energy Innovation report released by the International Energy Agency (IEA).

The second edition of the report, set to inform discussions at the 2026 IEA Energy Innovation Forum on 18 February, highlights more than 150 major technology breakthroughs recorded over the past year. It underscores how energy technologies have evolved into multi-trillion-dollar global markets, with innovation activity spanning batteries, transformers, turbines, motors and heat exchangers.

Energy Security Takes Centre Stage

For the first time, energy security has overtaken affordability and emissions reduction as the leading driver of innovation, based on surveys of experts and practitioners conducted in 2025. Governments are increasingly aligning innovation strategies with domestic manufacturing strength and supply chain resilience.

“Energy innovation has become a strategic priority for governments around the world,” said Fatih Birol, Executive Director of the IEA. “With energy security and industrial competitiveness at the top of the agenda, countries that sustain investment in research, demonstration and early deployment will be best positioned to lead the next generation of energy technologies.”

New policy initiatives such as the US Genesis Mission and the EU Competitiveness Fund signal a growing focus on strengthening technological sovereignty and securing critical supply chains.

Over 150 Breakthroughs Across Emerging Technologies

The 2026 report identifies innovation highlights across a wide range of emerging technologies, including solid-state air conditioning, perovskite solar cells, fusion energy, sodium-ion batteries and next-generation geothermal systems. These advances resulted in 50 upgrades in technology readiness levels among emerging energy technologies tracked by the IEA.

Energy-related patenting continues to expand, with roughly one in ten global patents now linked to energy technologies—exceeding filings in chemicals, pharmaceuticals and transport. Energy storage has emerged as a dominant area, accounting for 40% of all energy patents in 2023, with the share expected to have risen further in 2024 and 2025.

China, Korea and Japan remain leaders in lithium-ion battery patents, with China’s global share increasing sharply over the past decade. In solar innovation, patent activity has shifted strongly toward perovskite materials, which now represent more than 70% of solar cell patents by material type.

Public R&D’s Lasting Impact

The report highlights the long-term economic returns of public energy research and development (R&D) funding. Historical examples show early government support enabled breakthroughs in floating liquefied natural gas, lithium-ion batteries and advanced geothermal technologies.

Comprehensive evaluations of long-running public R&D programmes indicate that economic returns can exceed initial investments by several times—and in some cases by hundreds of times—through fuel savings, lower equipment costs and strengthened domestic industries.

Funding Trends Under Pressure

Despite the strong innovation pipeline, financial trends are showing signs of strain. Global public energy R&D spending in 2025 was estimated at $55 billion, down 2% from the previous year. Corporate R&D growth slowed to 1% in 2024, marking the weakest pace since 2015 outside the pandemic-affected year of 2020.

Venture capital (VC) investment in energy technology start-ups declined for the third consecutive year, reaching $27 billion in 2025. Higher interest rates, macroeconomic uncertainty and intensifying competition from artificial intelligence ventures have weighed on capital flows. AI accounted for nearly 30% of global VC funding in 2025, while energy’s share declined.

Regional Innovation Strategies Diverge

The report finds that regional approaches to energy innovation are becoming more distinct. China continues to expand its presence in corporate R&D and patenting, particularly in energy storage and industrial efficiency, alongside rising international patent filings.

Europe’s public energy R&D intensity has reached approximately 0.08% of GDP—approaching record highs seen in the 1980s and surpassing other major advanced economies. The United States remains a global leader in energy venture capital, accounting for nearly half of total energy VC in 2025. Japan maintains a strong specialization in batteries while advancing in perovskite solar, hydrogen-based fuels and fusion technologies.

Sustained Support Remains Critical

Against tightening financial conditions and shifting policy priorities, the IEA emphasizes that sustained and well-targeted public support remains essential. Aligning energy innovation strategies with competitiveness and resilience objectives will be key, particularly where technologies can reduce strategic dependencies or strengthen domestic supply chains.

The report concludes that while priorities may evolve, the long-term case for strategic investment in energy innovation remains strong. As energy systems become increasingly foundational to economic performance and national security, sustained collaboration between governments, industry and research institutions will be critical to maintaining momentum.