China’s clean-energy scale-up: cheaper hardware, but systems decide outcomes
By Mark Jansen, Center for Sustainable Finance at CATÓLICA-LISBON
“China is now making more money from exporting green technology than America makes from exporting fossil fuels.” (The Economist, 2025)
Overview
The Economist explains that China’s rapid growth in clean-energy manufacturing and deployment is changing both the speed and the economics of the energy transition. As factories have scaled, the costs of solar panels, wind turbines and batteries have fallen. Procurement is faster, so more projects move from plan to build. In many countries the key question is no longer whether equipment is available, but whether power systems can use much larger volumes of variable renewables without delays or waste.
Scale, price and exports
High-volume production has pushed unit costs down and improved delivery reliability. China is now the leading exporter of clean-energy equipment, lowering prices worldwide, most visible where affordability had been the main barrier. Deployment accelerates when local rules and infrastructure keep pace with procurement.
System readiness
Results depend on core enablers. Grids need timely transmission upgrades to move electricity to demand centres. Clear interconnection procedures and transparent queue management help projects connect on time. Storage and demand-side flexibility help match supply and demand as weather and demand change. Market rules that value these services reduce curtailment and raise effective use of new assets.
What this means for decisions
Investors: model connection timelines, congestion and curtailment risk, and how storage and flexibility are treated in market rules.
Policymakers and regulators: standardise PPAs and grid codes, set bankable tariff structures, and publish clear permitting and connection timelines while enabling flexibility and storage to participate.
Corporate energy buyers: balance headline price with supply-chain resilience, long-term service and maintenance, and performance guarantees.
International dimension
The Economist notes particular relevance for emerging markets. Stable policy frameworks and clear processes allow lower equipment costs to support faster electrification, reduced exposure to imported fuels, and progress on climate targets. Common risk measures include diversifying suppliers, using local assembly or joint ventures, and setting firm warranty and service obligations.
Coal and the generation mix
The overall impact depends on whether new renewable capacity displaces coal or runs alongside it. Dispatch rules, pricing and system flexibility determine how much coal is actually replaced as grid and market reforms advance.
Bottom line
Cheaper and more available clean-energy hardware is reshaping project economics. The pace at which it becomes reliable, clean electricity depends on system readiness: grids, interconnection processes, storage integration and market rules that reward flexibility.
Read more: The Economist, “China’s clean-energy revolution will reshape markets and politics” https://www.economist.com/leaders/2025/11/06/chinas-clean-energy-revolution-will-reshape-markets-and-politics?giftId=ZWQ0NDhkZTctMWMxMC00MTM3LTllMzYtMDFlZjQ5Y2ViMTgw&utm_campaign=gifted_article (Nov 2025).
