At the same time, China has practically caught up with developed countries in terms of the scale of international financing for clean technologies
Translated with AI assistance
Renewable energy is increasingly less like an expensive alternative to conventional power generation. In 2025, renewables allowed the global economy to avoid approximately $480 billion in fossil fuel costs and 8.4 billion tons of CO₂ emissions. These are the conclusions reached by experts at the International Renewable Energy Agency (IRENA). More than 90% of large-scale renewable energy projects commissioned over the year generated electricity more cheaply than the least expensive new coal or gas plant in their respective markets.
Savings have continued this year as well: in the first half of 2026 alone, renewables saved another approximately $265 billion, Simon Stiell, Executive Secretary of the UN Framework Convention on Climate Change, announced at the opening of COP31. In other words, the main argument in favor of green energy is becoming less about climate and more about economics.
One of the main drivers behind cost reductions is China’s mass production of solar panels, batteries, electric vehicles, wind turbines, and other clean-tech equipment. According to Reuters estimates, in 2025 China supplied developing countries with approximately $132 billion in clean technologies and investments, including around $40 billion in direct investment in projects and manufacturing facilities. By comparison, developed countries provided developing economies with $137 billion in climate finance in 2024.
These figures, however, cannot be compared directly. China’s $132 billion consists mainly of commercial exports and investments, whereas the $137 billion from developed countries also includes grants, loans for climate change adaptation, and recovery from natural disasters. But the comparable scale shows just how quickly Chinese industry has become an independent source of the energy transition for the Global South.
Almost two-thirds of China’s exports of solar panels and their components in 2025 went to developing countries. Pakistan alone imported 17 GW of solar panels from China — roughly the same amount that Germany installed over the course of a year.
According to estimates by the Centre for Research on Energy and Clean Air, equipment supplied by China in 2025 will allow Global South countries to avoid approximately 257 million tons of CO₂ annually once commissioned, while exports in 2026 will increase this effect to about 337 million tons per year.
It turns out that green technologies are increasingly spreading across the Global South not thanks to external climate subsidies, but because China has made them cheap enough for ordinary commercial demand.
But a cheap panel does not yet mean a cheap power plant. For many developing countries, the main barrier remains the cost of money. According to IRENA’s calculations, the weighted average cost of capital used in assessments for RES projects was about 12% in Africa compared to 3.8% in Europe. As a result, with comparable generation costs themselves, financing eats up a significant portion of the price of an African project.
The gap is also evident in investments: in 2024, a record $807 billion was invested in renewables, but capital remained concentrated in China and developed economies. On a per capita basis, China, Europe, North America, and Oceania received roughly 15 times more investment than sub-Saharan Africa.
For BRICS, the falling cost of renewables means that the energy transition is turning into a major industrial market. China already dominates many clean-tech supply chains, while Brazil and India are among the largest buyers of Chinese solar panels.
Green energy is thus gradually ceasing to be a story about how much economies will have to pay to reduce emissions. Increasingly, the question is being framed the other way around: how much can be saved through cheaper electricity and who will profit from the new energy infrastructure.
