Who Is Benefiting from Green Energy?

Debates about who wins the energy transition tend to be conducted in the vocabulary of the last one. Analysts ask which countries will become the new petrostates, which minerals will be the new oil, and whose sovereign wealth funds will swell on the profits of wind and sun. The questions are natural, because a century of hydrocarbons taught us that energy is a business of rents: whoever controls a scarce fuel controls a flow of unearned income, and with it a measure of power.

The difficulty is that renewable electricity does not behave like oil. It has no fuel cost, its equipment is manufactured rather than extracted, and its unit costs fall with every doubling of output. It is, in economic terms, a deflationary technology. Deflationary technologies do not usually enrich their sellers. They enrich their buyers, and they redistribute power towards whoever controls the few things that remain scarce.

This distinction matters more than it appears. If the transition were a contest over a new fuel, its winners would be the owners of that fuel. Because it is instead a collapse in the price of energy hardware, the gains are flowing in less obvious directions: to importers rather than exporters, to households that can pay cash rather than utilities that must borrow, and to whoever sits on the bottlenecks that cheap hardware cannot dissolve. Understanding who benefits from green energy therefore requires abandoning the petrostate analogy and asking a different question. Not who owns the resource, but who owns the constraint.

The sellers' paradox

Consider the country most often described as the transition's great winner. China's dominance of clean-energy manufacturing is not in dispute. The International Energy Agency estimates its share of every stage of solar panel production at more than 80%, roughly double its share of global demand. In batteries, the IEA places between 60% and 100% of each step of the supply chain inside China (Batteries International). By any conventional measure of industrial power, this is a commanding position.

Yet commanding the market has not meant capturing its rents. In the first half of 2025, China's four largest module makers, LONGi, Jinko, Trina and JA Solar, reported combined net losses of nearly RMB 11 billion, about $1.5 billion, two and a half times the losses of the year before (PV Tech). Revenues fell by between a quarter and a third as module prices stayed at historic lows. The firms that make most of the world's solar panels have, in effect, been selling them at a loss.

The implication is striking. A significant share of the value created by Chinese

manufacturing is not accruing to China at all. It is being transferred, through prices below cost, to whoever buys the equipment. Beijing's industrial policy, designed to secure strategic advantage, has also functioned as an involuntary subsidy to the rest of the world's energy transition. China retains the jobs, the technological know-how and the geopolitical leverage that come with controlling a supply chain, and those are not small prizes. But the financial surplus has largely escaped. In a deflationary industry, even a near-monopolist struggles to keep it.

The accidental beneficiaries

Where has that surplus gone? Some of it to the grids of Europe and the United States, but the most consequential recipients are found where few climate strategies expected them: in the cities and farms of South Asia and Africa.

Pakistan is the clearest case. No government planned its solar transition. It was improvised by households and businesses responding to soaring tariffs, chronic outages and suddenly cheap Chinese modules. Cumulative panel imports reached about 50 GW by August 2025, making Pakistan the third-largest market for Chinese solar in the world (Payne Institute), a volume roughly equal to the country's entire grid capacity (Business Recorder). Africa is following. In the twelve months to June 2025, the continent imported 15 GW of Chinese panels, up 60% in a year; twenty countries set import records, and in Sierra Leone the panels imported in a single year amounted to the equivalent of 61% of the country's entire electricity generation in 2023 (Ember, via pv magazine).

What makes these booms analytically interesting is how they were financed. The conventional wisdom holds that the developing world is locked out of the transition by the cost of capital, and at utility scale that remains true. But a rooftop system bought outright, or a few panels purchased in increments, does not need a bank. Collapsing hardware prices have allowed millions of households to bypass the capital markets entirely and finance their own generation from savings. The cash buyer, long the weakest participant in the energy system, has become one of the transition's most direct beneficiaries.

Where the rents survive

If hardware is deflating, value does not vanish. It migrates to the points in the system that cheap hardware cannot reach. Three such bottlenecks now determine more about the distribution of gains than any solar factory.

The first is capital. A solar farm's costs are almost entirely upfront, which means the price

of money effectively becomes the price of electricity. Two identical plants, one financed at 4% and the other at 10%, require annual capital payments about 70% apart over a 25- year life, though nothing about their technology differs. The IEA estimates that financing costs in emerging and developing economies are at least twice those in advanced economies or China, and higher still in Africa (Energy for Growth Hub). Africa holds nearly a fifth of the world's population but attracts only about 2% of global clean-energy investment (Energy Monitor). Rooftops can escape this trap; national grids cannot.

The second is the grid itself. Generation has become abundant; the right to connect it has not. In the United States, about 2,600 GW of generation and storage was waiting in interconnection queues at the end of 2023, more than twice the country's installed capacity. Projects completed recently took over four years from request to operation, and fewer than one in five projects that applied between 2000 and 2018 had been built (Berkeley Lab). In such a system, the scarce asset is not the panel but the permitted connection, and the owners of land near transmission, and of projects already holding a queue position, collect the premium.

The third is processing. Indonesia's 2020 ban on raw nickel exports is the most ambitious attempt by a resource-rich state to seize this bottleneck. Former President Joko Widodo reported that nickel export earnings rose roughly 19-fold, from $1.1 billion in 2014 to $20.9 billion in 2021 (Argus). But Chinese companies built more than 90% of the new smelters (CSIS), and generous tax holidays mean the state's fiscal gain is smaller than the export figures suggest (The Conversation). Jakarta succeeded in relocating the bottleneck to its own territory. It did not succeed in owning it.

The regressive core

The same logic that makes the transition progressive between countries can make it regressive within them. Where public money has been used to accelerate adoption, it has tended to follow those already able to adopt. Severin Borenstein and Lucas Davis found that the top income quintile of American households received about 60% of all US clean- energy tax credits, and about 90% of the credits for electric vehicles (NBER). More recent data show the pattern softening but not disappearing: the median income of American rooftop solar adopters in 2023 was $115,000, 53% above the national median, and renters remain largely excluded by the simple fact of not owning a roof (Berkeley Lab).

The deeper problem lies in the grid's fixed costs. Networks, backup capacity and legacy contracts must be paid for whether or not anyone buys electricity from them. When affluent customers generate their own power, those costs are spread across a shrinking base of those who cannot. Pakistan shows how quickly this can turn. Capacity payments

owed to power producers under take-or-pay contracts exceeded PKR 2 trillion, about $7

billion, in 2024 (Payne Institute), while daytime demand on the grid fell. The country's energy minister put the arithmetic plainly: the same payments must now be met by fewer consumers (KUOW/NPR). The households that bypassed the grid are among the transition's winners. Those left on it are financing their exit.

None of this is inevitable; it is a matter of design. For two decades Germany funded renewables through a surcharge on electricity bills while largely exempting heavy industry. At one point, exempted firms consumed about a quarter of the country's power but paid roughly 2% of the levy, an exemption worth some €5 billion a year that households and small businesses absorbed (POWER Magazine). In 2022 Berlin abolished the surcharge and moved the cost onto a state fund financed partly by carbon-trading revenue (German Federal Government). The technology did not change. The distribution of its costs did.

The politics of bottlenecks

The answer to the question of who benefits from green energy is therefore more paradoxical than the familiar narratives allow. The industry's dominant manufacturer has struggled to profit from its dominance. Some of the poorest energy consumers in the world have captured gains that their governments did not plan for and their utilities cannot absorb. Meanwhile, the durable rents of the new system are accumulating not in fuel or in factories but in bottlenecks: cheap capital, scarce grid connections, mineral processing, and the political power to decide who pays for the network everyone still needs.

This has uncomfortable implications for several kinds of actor. For resource-rich states hoping to replicate the petrostate model with lithium, nickel or sunshine, it suggests that geology confers far less than it once did; what matters is control of processing and finance. For industrial powers, it suggests that manufacturing dominance is a strategic asset but not necessarily a profitable one. And for governments everywhere, it means that the distributional character of the transition will be determined less by technology than by tariff design, subsidy targeting and the cost of public borrowing. These are unglamorous instruments, but they decide who gains.

The central policy task follows from this. Governments should spend less effort competing for the commodity segments of the value chain, where deflation erodes margins, and more on owning or regulating its chokepoints: lowering the cost of capital through guarantees and risk-sharing, investing in transmission ahead of demand, and redesigning tariffs so that the fixed costs of the grid are not quietly shifted onto those

least able to leave it. The petrostate era rewarded those who owned what lay beneath the

ground. The electric era will reward those who own what lies between the panel and the plug.