Clean technology markets have undergone a profound transformation. What began as a science-based necessity to mitigate climate change has rapidly evolved into a compelling economic opportunity. The falling costs of solar panels, batteries, and electric vehicles are no longer driven by subsidies alone; market forces have fundamentally entered the equation. Clean technologies are no longer just the “green” choice; they have become the most competitive ones. Yet alongside this shift, a more complex reality has emerged: the geography of manufacturing clean energy technologies is strikingly concentrated. This was a central theme of a recent talk by Timur Gül, Chief Energy Technology Officer at the IEA and a proud alumnus of both PSI and ETH Zürich.
A trillion-dollar clean tech market to at least double
in the next decade
The cleantech market, including electric vehicles, wind power, and solar power, has been growing and is expected to continue to expand. The IEA estimates that this market exceeded USD 1 trillion in 2025 (see Fig. 1) and is expected to grow to USD 2-3 trillion by 2035, depending on whether planned supporting policies take shape. In any case, the market’s current growth rate reflects that at-scale cleantech deployment is already a reality, not a future promise. Crucially, this growth is happening with existing technologies. Solar photovoltaics and batteries are not waiting for a breakthrough; they are being manufactured and deployed today, in large volumes, at continuously falling costs. Timur attributed this exponential growth to two key trends. First, clean technologies are increasingly being mass-manufactured due to their modular nature, enabling steep cost reductions. Secondly, the growing electrification of energy systems is supporting this growth in demand for electric mobility and renewable electricity generation technologies.
While the clean tech market is expected to grow, a closer look at manufacturing reveals a more nuanced picture. Global manufacturing investment in key clean energy technologies peaked at nearly USD 220 billion in 2023, declining by 6% in 2024. Utilisation rates tell a similar story: solar PV module factories in China are operating at around 57% of capacity, while electrolyser manufacturing facilities average as low as 10% globally. Also, manufacturing capacity is heavily concentrated geographically: China accounts for over 85% of global solar PV supply capacity and around 80% of batteries.
Chinese cleantech manufacturing: learning curves
and industrial scale
To illustrate China’s dominance over the cleantech supply chain, Timur shared a few key statistics. Without China, only less than 25% of cathode demand outside China could be met. A single Chinese company, CATL, the world’s largest battery manufacturer, could meet all battery demand outside China. For solar panels, a single Chinese manufacturer, Jinko Solar, could, in principle, meet all of Europe’s demand. These numbers reflect the extraordinary concentration of manufacturing capacity within a single country that has emerged over the past decade.
Timur explained that China’s growing dominance in cleantech manufacturing capacity can be traced to two forces, in addition to demand-side policies that helped create a large domestic market. First, sustained investment in energy R&D: government spending has more than doubled, from around USD 7 billion in 2015 to USD 18 billion in 2025, and China has accounted for 45% of the world’s energy-efficiency patents between 2015 and 2024, giving its manufacturers access to cutting-edge production processes. Second, the sheer scale of its production facilities has enabled steep cost reductions. According to the learning-curve theory, technology costs fall predictably and consistently as cumulative production increases. China’s huge domestic demand (also driven by policy support) has allowed it to accumulate this production experience faster than any other country. As such, China moved further and faster down the cost-deployment curve than Europe or the United States. Today, depending on the technology, Chinese manufacturers can produce key cleantech products at a 30-60 per cent cost advantage compared to the EU.
Growing demand, concentrated supply and the
policy dilemma
To summarise the key trends in the global cleantech markets, demand for clean energy products will continue to grow, while they will be manufactured predominantly in a single country. This market, characterised by concentrated supply and dispersed demand, makes international trade a key feature of the energy transition, with China being a major cleantech exporter to the world. In 2025, China’s clean energy technology exports were valued at more than USD 160 billion, accounting for 15 per cent of China’s trade surplus across all goods, while the rest of the world is a net importer of such technologies. China’s cleantech net export value is expected to grow to USD 375 billion by 2035, with the EU importing USD 165 billion (see Fig. 3).
These conditions create a policy tension from a European perspective: do we continue importing clean energy technologies from China, which are cheap, and reduce the current reliance on imported fossil fuels, but become dependent on a single country for a supply of cleantech products? Or do we spend more to invest in locally produced clean energy technologies, which would entail a more expensive and potentially slower transition to net zero?
