This working paper is adapted (with permission) from “Market-oriented Incentives to the Innovation of New Energy Companies,” published in China Industrial Economics (2017, No. 12).
Market Drivers such as Venture Capital are Promoting Renewable Energy Innovation and Development in China
China’s renewable energy development is transforming from an industry of government support to one of market dominance. On the one hand, the market should play a decisive role in the allocation of resources so that the invisible hand can promote renewable energy enterprises’ strengthening of technological innovation and enable them to develop in healthy competition. On the other hand, China should give full play to the functions of the government, and with the orientation of national development strategy and planning, deepen the marketization reform of the electricity system to break up the monopoly and coordinate the incentive mechanism of renewable energy in different regions and sectors so as to create a good institutional environment for innovation and development of renewable energy.