Higher interest rates threaten renewable energy sector

Analysts warn that the renewable energy sector faces significant challenges due to soaring interest rates, posing a threat to the worldwide transition to sustainable energy. 

With interest rates in the US reaching multi-decadal highs since 2023, borrowing costs have surged, particularly impacting capital-intensive renewable projects heavily reliant on subsidies. Vegard Wiik Vollset, head of renewables and power (EMEA) at Rystad Energy, emphasizes the vulnerability of new renewable projects to high-interest rates, while existing projects with secured debt remain relatively unaffected.