Investment in what most call clean technologies dropped by 17% over the first half of the year, as China switched from subsidies to a market-based approach to those industries, a report from Rhodium Group has revealed.
Investments in things such as wind and solar power rose in other parts of the world, but China’s decline more than offset that growth because of China’s position as the top investor in clean tech, far ahead of everyone else.
“Geographically, the decline was driven by China, the world’s largest cleantech investor, where a shift to market-based pricing put pressure on new renewable power investments,” said the author of the report, Hannah Pitt, as quoted by Reuters.
“China’s transition toward market-based pricing for new renewable generation in 2025 drove a rush of installations ahead of the deadline, followed by an uneven pullback. Beijing also phased out consumer EV purchase-tax exemptions starting January 2026,” the report pointed out.
These decisions led to a sharp slump in alternative energy and electric transport investment of 49% for China, translating into $133 billion. This trend also slashed China’s share of clean tech investment from 52% at the end of 2025 to 39% by June this year.
Meanwhile, investment in clean tech in India and Europe increased in the period. India is still catching up with China on wind, solar and EVs, and the European Union is doubling down on subsidies for every transition-related technology in accordance with its net-zero first agenda.
“These developments are unfolding as governments reassess clean technology support, trade policies, and supply chain strategies,” the report noted, as governments rearrange their priorities in the context of increasingly tight hydrocarbon supply that has put energy security in the spotlight. With hydrocarbon energy more expensive, there is less money to put into clean tech, although some countries have pledged fast growth in, for instance, solar, to replace natural gas for power generation as gas prices soar.
By Irina Slav for Oilprice.com
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