From 2019 to 2023, China’s renewable energy exports will increase by 35%.

China’s exports of renewable products increased by 35% between 2019 and 2023, driven by competitive prices and dominant production capacity, according to a new report by Wood Mackenzie.

Power batteries have overtaken solar modules to become China’s top renewable energy export over the past four years. Over the same period, investment in wind and solar projects increased by 26% and accounted for 39% of all Belt and Road projects in 2023.

The report shows that Chinese renewable energy companies are actively pursuing global business opportunities. Renewable energy investors typically invest in markets with high energy demand, a stable business environment and predictable revenue streams. Meanwhile, Chinese manufacturers are targeting markets with local requirements to become regional production hubs.

“Renewable energy is preferred by Chinese developers for short-term overseas investment over other conventional power generation technologies. Over the past decade, over a hundred wind and solar projects have been built in the Belt and Road market,” said Xiaoyang Li, director of energy and renewables research APAC at Wood Mackenzie.

Integrated supply chains, rapidly falling prices and high performance standards have enabled Chinese renewable energy producers to meet more than 65% of total global demand, and Wood Mackenzie expects this trend to continue.

Low production costs have helped Chinese renewable energy producers offer attractive prices that are up to 200% lower compared to Western players in major competitive markets. The report found that prices for non-Chinese products are twice as high as prices for comparable equipment made in China.

“By taking advantage of a robust domestic supply chain, equipment produced by Chinese manufacturers abroad remains price competitive despite growth caused by inflation uncertainty and higher production costs,” Li said.

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

Li added: “With the support of strong equipment supply chains from Chinese manufacturers, Chinese solar and storage investors prefer greenfield investments as they look for opportunities abroad. Meanwhile, wind energy investors tend to acquire existing assets given the long construction period and high development risk.”

Chinese investors prefer markets with high energy demand, a stable business environment and predictable revenue streams, but these markets also face geopolitical problems.