Even as global economies make efforts for ‘onshoring’ and ‘friendshoring’ clean-tech production, China continues to command the lion’s share of investments in this space. The Asian giant took around 76% of the global clean-tech factory investments in 2024, especially for solar modules, wind turbines and batteries.
Chinese firms are investing 5x more at home than all other countries combined, according to Bloomberg New Energy Finance’s (BloombergNEF) Energy Transition Supply Chains 2025 report, available only to its clients.
China controls over 70% of the global manufacturing capacity in every major segment covered by the BloombergNEF report, barring hydrogen electrolyzers. In 2024, it further consolidated its market share in solar and battery supply chains.
As of last year, the country accounted for more than 80% of the global polysilicon, wafer, cell and module manufacturing capacity in solar technology.
Overcapacity is here to stay
The year 2024 was also a defining year for the solar industry, thanks to significant overcapacity in this space that ensured prices fell sharply, squeezing profit margins for manufacturers. The average EBITDA margins for 5 major Chinese solar firms dropped to 4.7% in 2024, down from 12.4% previously. The report writers add that this was the case not just for solar but for other technologies as well.
According to BloombergNEF, overcapacity is not going anywhere and is expected to persist through at least 2027, especially in solar and battery manufacturing.
“The dust has yet to settle, but a few macro trends are clear: overcapacity will define clean technology supply chains for years to come. And emerging markets will rapidly step up imports of energy transition products as prices fall further,” observes BloombergNEF’s Head of Trade and Supply Chains and Lead Author of the report, Antoine Vagneur-Jones.
Investment trends
Despite political and financial risks, China is expected to remain the top destination for clean-tech investment, further contributing to the increase in global overcapacity. Rising tariffs may strain US-China trade and affect imports in developing countries.
The US leads in clean-tech subsidies, expected to cost $169 trillion by 2032, more than all other countries combined. However, new Trump-era tariffs on Chinese materials may slow progress, according to the report writers. Additionally, political risks could put $110 billion in planned factories across multiple sectors in jeopardy in the country, including grant funding for the Inflation Reduction Act (IRA).
The European Union (EU) is providing only $32.5 billion in subsidies, and this lack of financial support is impacting the industry, especially solar, where several flagship manufacturers are either scaling back or going bankrupt altogether.
As advanced economies prioritize protectionism through tariffs, developing markets are booking Chinese supply, which saw the average share of the latter’s exports to emerging markets increase from 24% in 2022 to 43% in 2024.
BloombergNEF’s Lead Solar Analyst Jenny Chase, at the TaiyangNews Solar Market 2024 Review & 2025 Outlook Webinar in January 2025, said that 2025 will be another difficult year for solar manufacturers, leading to consolidation in the industry due to some of the above factors.
