China’s massive spending on renewable energy is putting the global sector on track for its first annual gain in three years. That’s according to new data from Bloomberg New Energy Finance, which estimates that some $175 billion was spent on clean-energy projects in the first nine months of the year, a 16% rise on the same period last year:
The jump in investment makes it “almost certain that 2014 will produce a bounce-back in dollars invested after two years of decline,” the research firm said. The gain is also almost entirely down to China, which spent $15 billion more on clean energy in the first nine months of 2014 than it did last year, accounting for the bulk of the global industry’s $25-billion increase so far this year.
China has decisively seized the lead in renewable-energy investment from Europe in recent quarters:
But the bullish projections for China’s investment in clean energy—particularly solar power—rely heavily on Beijing’s continued subsidies, which have resulted in plummeting equipment costs. Without Chinese government support, the entire renewable market might look more like Europe, where spending in the third quarter was the lowest in eight years after similar supports were cut.
From solar power in Germany to wind energy in Denmark, weak economic growth and fragile government finances have made European officials much less willing to subsidize renewable-energy investments, and the impact on spending has been severe. With China’s economy showing worrying signs of weakness, Beijing could all too easily have a similar change of heart.