One of China’s most notable areas of leadership is in solar energy. Photo by Reuters.
In the fast-evolving race toward a decarbonised future, one country is leaving much of the world behind, China. According to the latest World Energy Investment 2025 report from the International Energy Agency (IEA), China is now investing almost as much in energy as the United States and the European Union combined. And what’s more, the biggest share of that investment is going into clean, renewable technologies.
The IEA’s report, published last week, estimates that global energy investment will reach $3.3 trillion in 2025, a modest 2% increase compared to 2024. Of this colossal sum, roughly $2.2 trillion is earmarked for clean energy technologies, marking a new record in global climate-aligned investment. These include solar photovoltaics, wind, nuclear, battery storage, improved grid infrastructure, and electrification measures such as electric vehicles and heat pumps.
China’s outsized role
While many countries have pledged ambitious targets to reach net-zero emissions in the coming decades, China is already putting its money where its mouth is. The IEA reports that China alone accounts for nearly one-third of all global investment in clean energy, up from just a quarter a decade ago.
To put it in perspective, China’s energy investment footprint in 2025 is expected to rival the combined clean energy investment of both the United States and the European Union. This staggering figure not only underscores China’s dominant industrial role in the global energy transition, but also highlights a growing East-West divide in infrastructure and energy strategy.
According to Spanish outlet Energías Renovables, which covered the IEA’s report this week, China is heavily focused on expanding its solar PV production capacity, battery manufacturing, and electric grid enhancements, key pillars for achieving deep decarbonisation.
Solar supremacy, storage ambition
One of China’s most notable areas of leadership is in solar energy. The IEA notes that Chinese companies are responsible for over 80% of the world’s solar panel production, a fact that makes its domestic investments in solar infrastructure doubly significant. Not only is China installing more panels than anyone else, it’s also producing most of the ones used globally.
Battery manufacturing and storage infrastructure are also receiving a major boost, with Beijing seeing long-duration storage as essential to a stable and resilient renewable-powered grid. The synergy between solar deployment and storage capacity is crucial for mitigating the intermittency challenges posed by renewable energy.
A strong grid — but not strong enough
Despite this impressive surge in renewables and storage, the IEA warns that China, like many countries, is not investing fast enough in its electrical grids. While solar and wind investments are booming, outdated or insufficient grid capacity could soon become a bottleneck, preventing all that green energy from reaching consumers or being properly balanced across the country.
The report states that global investment in grids needs to double by 2030 to keep pace with clean energy goals. In China’s case, its network infrastructure risks falling behind its generation capacity, potentially straining the system and increasing vulnerability to outages or curtailment.
Geopolitical implications
China’s massive energy spending spree is not without global consequences. As Western nations strive to reduce emissions and meet their climate commitments, China’s dominance in clean energy tech could create new dependencies, much like how Europe once relied heavily on Russian gas. Whether in solar panels, batteries, or rare earth elements, China is increasingly seen as an energy superpower of the green transition.
This shift also raises questions about long-term energy security and technological sovereignty. Europe and the US have launched multi-billion-dollar initiatives, such as the EU’s Green Deal Industrial Plan and the US Inflation Reduction Act, to bring clean tech manufacturing closer to home. But as the IEA’s data shows, China remains several steps ahead in both scale and speed.
Looking ahead
The good news? Global momentum is building. With $2.2 trillion going into clean energy this year, 2025 will mark a historical milestone. Investment in electricity generation, grids, and storage now surpasses fossil fuel investment by 50%, a strong signal that the transition is not only underway, it’s accelerating.
But the pace must quicken. The IEA warns that, without bolder policy support and faster grid upgrades, many countries may fall short of their climate targets. China’s example shows what’s possible when investment aligns with infrastructure and industrial strategy. Whether others can follow suit, and whether they should emulate China’s centralised approach remains to be seen.
For now, though, one thing is clear: if clean energy is the engine of tomorrow’s economy, China is already sitting in the driver’s seat.
