Global clean energy investments have surged from US$248 billion in 2014 to US$745 billion in 2023, with China emerging as the undisputed leader in deploying clean energy technologies.
This rapid scale-up has not only positioned China as a cleantech powerhouse but also triggered a global response, prompting other nations to accelerate their own energy transitions.
China’s total spending on solar and wind has outpaced the rest of the world, climbing from US$150 billion in 2020 to nearly US$400 billion in 2023.
The country has also made substantial investments in renewable energy infrastructure relative to its population size, surpassing key regions like Europe and the US on a per-capita basis.
Lars Nitter Havro, Head of Energy Macro at Rystad Energy, explains: “The scale of China’s investments in cleantech capacity has had a profound impact on the global energy transition. Unmatched capacity growth and the resulting price cuts for Chinese equipment have enabled other regions to accelerate their renewable energy investments.”
China’s vast manufacturing capabilities and infrastructure have solidified its position in the cleantech sector, particularly in solar and battery supply chains.
The country controls around 80 per cent of the global solar PV module supply chain and produced 90 per cent of all solar PV components last year.
However, other regions are actively expanding their manufacturing capacity to reduce reliance on China:
- The US and India are aggressively investing in cell manufacturing and module assembly plants, aiming for self-sufficiency by 2026.
- Europe, the US, and India are expanding solar panel manufacturing capacity.
Despite these efforts, production costs remain significantly higher outside China.
Chinese solar modules cost around US$0.10 per watt, while US prices hover around US$0.30 per watt.
As nations develop their own cleantech manufacturing capabilities, they face a complex dilemma: whether to invest in domestic manufacturing or rely on Chinese supplies to meet climate goals.
Balancing the growth of local industries with the need to utilise China‘s existing capabilities is crucial for achieving global climate objectives.
While China’s investment lead is projected to narrow by the year’s end, it may fade entirely by 2027 as other regions increase their spending.
The year 2027 marks a critical point when the rest of the world is expected to begin outpacing China in manufacturing, particularly due to growing investments in the US.
As the global race for clean energy intensifies, countries must navigate the delicate balance between energy security, affordability, and long-term strategic interests in the rapidly evolving landscape of renewable energy investments.
