Chinese exports of renewable products grew 35% between 2019 and 2023, driven by competitive prices and dominance of production capacity, according to Wood Mackenzie’s new “Looking Abroad” report.

Power batteries overtook solar PV modules to become China’s top renewable energy export product in the past four years. In the same period, investment in wind and photovoltaic energy projects increased by 26% and accounted for 39% of the total Belt and Road projects in 2023.

According to the report, Chinese renewable energy companies are actively seeking global business opportunities. Renewable energy investors tend to invest in markets with high energy demand, stable business environments, and predictable income streams. Meanwhile, Chinese manufacturers are targeting markets with local content requirements to become regional manufacturing hubs.

“Chinese developers prefer renewable energy in short-term foreign investments compared to other conventional power generation technologies. More than a hundred wind and solar projects have been developed in the Belt and Road market in the last decade,” said Xiaoyang Li, Director of APAC Power and Renewable Energy Research at Wood Mackenzie.

Integrated supply chains, rapidly falling prices and a high level of performance have enabled China-based renewable energy manufacturers to supply more than 65% of total global demand, and Wood Mackenzie expects this trend to continue.

Low manufacturing costs have helped China-based renewable energy manufacturers offer attractive prices, which are up to 200% lower compared to Western players in major competing markets. The report found that prices for non-Chinese products are twice those of comparable equipment made in China.

“Benefiting from a strong domestic supply chain, equipment produced by overseas Chinese manufacturers remains competitively priced despite an increase due to uncertainty over inflation and higher production costs,” Li said.

According to the report, Chinese companies’ interest in investing in overseas renewable projects is increasing, but progress is slow due to high development risks and uncertain revenue streams.

Li added: “Backed by strong equipment supply chains from Chinese manufacturers, Chinese solar and storage investors prefer greenfield investments when seeking overseas opportunities. Meanwhile, wind energy investors tend to acquire existing assets, considering long construction periods and high development risks.”

Chinese investors prefer markets with high energy demand, stable business environments and predictable income streams, but these markets also face geopolitical issues.