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Read original →China Doubles Down on Solar: Investors Return to Green Energy Sector
Analysis of investment prospects in renewable energy in China and the US. Review of Global X China Clean Energy ETF and Invesco Solar ETF with price targets and recommendations. Solar energy growth forecasts.
AI summary
After a two-year correction, the renewable energy sector is becoming attractive for investment, especially in China. The Celestial Empire remains the global leader in installed solar and wind energy capacity with growth of more than 300 GW per year. Analysts recommend buying ETF Global X China Clean Energy (2809.HK) with a target price of HKD 88.4 and Invesco Solar ETF (TAN) with a target price of $48.4.
Following the 2020-2021 boom, most global renewable energy stocks came under pressure. This was driven by renewed investor interest in fossil fuels amid relatively high prices, intense competition in the renewable energy sector, elevated interest rates, and reduced government support in some countries (such as the U.S. under the Trump administration). That said, the main negative factors have now largely been priced in by the market, while green energy development continues in the world's largest economies. Against this backdrop, we believe now is a good time to consider investments in the renewable energy sector.
In our view, China is currently one of the most promising regions for investment. The Middle Kingdom is the absolute global leader in installed capacity for solar and wind energy, as well as in annual growth rates. In 2025, the combined capacity additions in solar and wind energy could exceed 300 GW for the second consecutive year. Growth is primarily driven by solar—China's solar energy association expects additions of up to 255 GW in 2025, compared to 277 GW the previous year. It's worth noting that historically, the association's forecasts have been quite conservative—a fact underscored by solar capacity additions of 212.2 GW in January-June of this year, 2.1 times higher than a year earlier.
At the same time, it's important to note that this year's seasonality for solar capacity additions will likely be inverted. Traditionally, China sees the largest capacity additions in December, but this year the peak was likely reached in May. This is due to regulatory changes—starting June 1st, pricing for solar and wind power plants became market-based, no longer guaranteeing a certain level of profitability. However, even with the strong capacity additions in May and the regulatory change in June, additions still reached 14.2 GW in June. We believe June's solid performance speaks to the strength of China's solar energy development trend.
Despite its existing leadership in renewable energy in absolute terms, China still retains significant potential for further energy transition. Currently, coal remains the foundation of China's energy balance, and even in electricity generation—where renewable penetration is highest—fossil fuels accounted for 62% in 2024.