Despite its voracious thirst for coal, China’s growing interest in clean energy makes them an investment target too big to ignore…
Finally. The US clean energy market is beginning to make some long-awaited headway.
A quick look at the charts and you’ll see that a number of solar energy companies are hitting a bullish stride — one not seen in years.
One the one hand, maybe they are simply riding the coattails of a hot stock market right now. After all, the Dow Jones and S&P500 are hitting record highs practically every other week.
Or maybe it could be that some of the nearly $2.5 billion in tax credits that our POTUS has thrown at the sector is actually starting to stick.
Whatever the reason, clean energy in America is showing signs of traction. But sadly…no one else seems thrilled with our progress. And I don’t blame them.
According to a report by Pike Research and the Advanced Energy Economy Institute, the US is expected to have generated some $157 billion in clean energy revenues in 2012.
That alone is a feat worth celebrating. But to the outside world, we’re crawling at a snail’s pace.
Australia’s wind sector is already able to generate electricity for a fraction of what it costs via new coal or gas-powered plants.
Germany, the darling of the clean energy renaissance, gets nearly 25% of all its electricity from renewable sources. The country is well on its way to meeting its 80% target by 2050.
Now another nation – more synonymous with fossil fuels than renewables – is also leaving America in the carbon-free dust.
In a recent report by Australia’s Climate Commission, China increased its wind power capacity by 36% and its solar capacity by 75% in 2012.
Overall, China invested over $65 billion in clean energy last year – a figure unmatched by any other country.
Their investment represented 30% of the entire G-20 collective, which includes the US, who spent $35 billion in 2012.
Want to know precisely how far ahead the Chinese are?
Consider the following:
- China is introducing a cap-and-trade system on June 17, 2013The US had devised a plan of their own, but the proposal died in the Senate in 2009, and there’s been no other plans to speak of except for a few regional programs.
China’s proposal meanwhile is going full steam ahead, beginning with seven of the nation’s most bustling regions, including: Guangdong and Hubei provinces, Beijing, Shanghai, Tianjin, Chongqing and Shenzhen.
By 2020, China intends to link those regions into a national carbon market and eventually joining forces with Australia on a larger cap-and-trade program.
- China is launching a carbon taxWhile the US Senate also shot down what would have been an historic amendment to open the doors for a carbon tax scheme, China took the high road instead.
Beginning sometime between 2015 and 2016, Chinese officials have announced that they will introduce a tax on CO2 emissions. With the amount of economic activity taking place in that country, it’s a license to print money.
- China invests more in renewable energyAlthough China’s population is more than quadruple the size of the US, its economy is only half of what we generate.
In other words, $65 billion in clean energy investments for a nation of over billion people may not seem like a lot. But as a fraction of its overall economy, China’s investment is nearly four-fold what the US mustered up in 2012.
- China is the king of solar panel productionLess than a decade ago, Americans produced nearly 40% of all the world’s solar panels while China manufactured less than 1%.
The tables have now turned completely, with China supplying more than half of the world’s panels while the US has shrunk to less than 10%.
- China is next in line to the solar installation throneThey don’t just crank out panels for the rest of the world to use. China is also a top market for system installations.
According to the European Photovoltaic Industry Association, the Chinese installed 5 GW of new systems, behind frontrunner Germany who had 7.6 GW installed. The US was fourth last year with 3.3 GW.
- China is a big wind installer too… number 1 in factSurprisingly, China installed more new wind power systems in 2012 than new coal plants. The amount of wind installations has doubled that of coal, making them the world’s biggest market for wind.
Figures compiled by Bloomberg showed that China installed 15.9 GW of wind power in 2012. What’s even more impressive is that onshore wind is now the third-largest electricity source behind coal and hydropower in that country.
Even with a total of 61 GW of cumulative grid-connected wind energy capacity under its belt, the country expects to top 140 GW by 2015.
With all that China has and continues to accomplish in the clean energy space, it’s only a matter of when, not if, renewable energy becomes as affordable to the masses as oil, gas, or coal.
With the steps they have taken so far, China is no doubt headed in the right direction. Their government acknowledges that in order to keep its economy growing over the long term, they need to find and secure more energy sources and supplies.
Undoubtedly, clean energy is an area with near-limitless growth opportunities.
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