Navigating the energy transition: A review of factors influencing renewable energy investments

As global electricity consumption rises, energy systems face increasing challenges, highlighting the urgent need for a reliable energy supply with minimal (socio-)ecological impact. In response, policymakers set ambitious targets for the sustainable energy transition, requiring substantial growth in renewable energy (RE) investments. However, recent socio-economic challenges—such as the COVID-19 pandemic, geopolitical conflicts, economic uncertainties, and evolving climate movements—have significantly influenced the investment landscape. These disruptions underscore the necessity of continuously reassessing the factors influencing RE investments to ensure that research and policy decisions are based on current realities. This paper provides an updated analysis of the political, economic, environmental, social, and technological (PEEST) factors shaping RE investments. Using a systematic literature review and expert interviews, we examine 37 PEEST factors affecting investment decisions. Our findings indicate that economic factors, particularly profitability and financial risk, remain the necessary drivers of RE investments, while political factors significantly shape the regulatory framework, either facilitating or constraining RE development. Although environmental, social, and technological factors are supporting factors in direct investment decisions, they influence economic considerations and long-term market stability. By offering a contemporary and dynamic assessment of RE investment factors, this study provides 13 key takeaways for policymakers, investors, and researchers, ensuring that energy transition strategies are grounded in up-to-date realities rather than past assumptions.