In their recent article Energy, Ecology, and the 'Transition': Why Logistics is a Class Question Foppe de Haan suggests that talk of an energy “transition” is a sort of bourgeois ideology, as the recent rise of renewable power sources, most notably solar, will only ever be additive within capitalism and never actually displace fossil fuels.

Here is one passage that encapsulates the argument:

Even where LCOE is accurate, lower cost does not translate into higher profit in unbundled electricity markets, because competition, the cannibalization effect (rising renewable energy (RE) penetration depressing the wholesale prices from which RE earns revenue), and revenue uncertainty make profitability unknowable in advance. JPMorgan's head of energy strategy calls LCOE "a practical irrelevance" for the financiers who actually decide whether projects proceed. Typical RE project returns are 5–8%, against 15%+ for oil and gas — which is why no major RE build-out anywhere has proceeded without state guarantees.

There are a few contradictions here, the most important of which are if renewable energy is putting downward pressure on wholesale prices that will also negatively impact oil and gas project returns. Past oil and gas returns will not be indicative of oil and gas returns in a world with greater renewable energy penetration.

And indeed, despite all the legacy of decades of fossil fuel investment, things are changing. We can look at investment trends empirically and see that total fossil fuel investment has been falling since the 2010s shale boom, while renewable energy investment has been rising, with renewables expected to exceed all fossil fuel investment in 2030 with some naive linear extrapolation. Indeed, renewable energy already in 2025 exceeded every individual type of fossil fuel investment, including oil, gas, and coal.

Of course, fossil fuel investment will need to fall much further in order to matter, as the capital stock has been built up for decades and will take further decades to naturally depreciate away, assuming it is not destroyed in war or forced to be shuttered by governments. But it’s worth noting here that the linearity of this extrapolation is almost certainly an overestimate of the sticking power of fossil fuels. The price decline in solar panels and batteries has been non-linear in nature, and so has their adoption. The energy crisis caused by the Iran war will no doubt also generate more demand from states and businesses.

One thing that was left unremarked by Haan was the role that energy consumers, whether businesses or households, would play in the future of energy markets. Some of the largest recent purchasers of Chinese solar have, after all, been not for grid projects, but rooftop solar in places like Pakistan and other developing countries, where grid power has been unreliable. But for any consumer of energy, whether in rich or poor countries, solar represents a unique cost-saving proposition that will eventually pay for the upfront capital expended. This is why the price does matter, whether or not grids are capable of absorbing the vicissitudes of solar energy production.

The creation of cheap solar via incredibly high Chinese investment and sustained industrial policy cannot be understated here. For the first time, the majority of the developing world may be freed from onerous interdependency and compelled dollar-denominated exports to secure energy. The catastrophe in Cuba could have been largely averted if investment in solar had begun much earlier, as would the catastrophe facing much of the developing world due to the ongoing energy crisis. The industrial and natural resource costs of solar are, in fact, fundamentally different from the costs of fossil fuels, for the simple reason that fossil fuels are a fuel while solar is a piece of fixed capital. Solar panel consumption occurs only at the pace of their depreciation, whereas fossil fuels have to be consumed continuously in order to create energy. This means that while the natural resource costs of transitioning to solar energy may be comparable to those of fossil fuels upfront, they will necessarily decline dramatically once the capital stock stabilizes. And as R&D knowledge accumulates, we should expect to see many of the more exotic materials required in solar panel and battery supply chains replaced by more common ones.

Haan brings up that capitalism flourishes based on the costs associated with investment. This is certainly true, as it is true that in capitalism, it is only the flows of consumption that generate income, rather than stocks of wealth. But it is not true that, for this reason, capitalists or consumers or states (with perhaps the exception of the United States of America) will prop up fossil fuel infrastructure to maintain high levels of expenditures. I’ve heard a similar argument from Malcom Harris that this is the logic behind the AI data center buildout. But both the AI data centers and the fossil fuel investment in the US are major exceptions to the trends of US investment overall. When Haan says that investment in fossil fuel infrastructure was 2/3rds of net investment in industry for the US between 2009 and 2019, this has less to do with the strength of the fossil fuel industry and more to do with the weakness of industrial investment in the US, which has ceased to grow as a share of GDP since the beginning of neoliberalism. Both the oil and data center booms were/are largely failed attempts at rent capture, specifically natural resource and land rents for the oil boom, and software IP rents for the AI boom. If it were true that capitalists would make fixed capital expenditures simply for the sake of economic activity, neoliberalism would not have the character of massive deindustrialization.

Financial investors in the oil and gas sector in the US were not particularly rewarded by their enthusiastic fixed capital investments, seeing essentially flat returns for a decade up until the recent energy crisis. This is one reason why American oil companies are not particularly interested in putting money towards boosting output now, despite the President’s pleas and a massive price spike: a Fed survey of oil executives in April put the increase in oil output for 2026 and 2027 as between 0 and 2%. Indeed, if the UAE can survive the war with its oil infrastructure intact, its exit from OPEC would likely mean the forced closure of American marginal producers.