Renewable energies are exploding in emerging economies as the economics of wind and solar make it the obvious choice in most national and regional contexts. What’s more, the rapidly changing economics of renewables are not just saving money for developing countries, they could soon be making money in considerable sums in many emerging economies.

A recent study from Oxford University finds that low- and middle-income countries stand to benefit the most from adopting renewable energies, with potential GDP gains of around 10 percent in the next 2025 years if they implement a speedy enough transition. This renewable-fuelled economic growth is already underway. The report finds that renewable investments in the world’s 100 largest developing countries (not including China) contributed a combined $1.2 trillion to GDP growth between 2017 and 2022. For most of these nations, that equates to about 2-5 percent of GDP.

“Renewable energy drives prosperity,” reads the report’s executive summary. “Done well, it can expand affordable energy access, attract investment, create new jobs and increase productivity for the entire economy.”

This is due to several compounding factors. First, renewables have become ridiculously cheap to install and operate. Solar energy, in particular, has seen an incredible economic evolution, with prices plummeting by a positively stunning 90 percent since 2010. “Right now, silicon panels themselves are the same cost as plywood,” Sam Stranks, Professor of Energy Materials & Optoelectronics at the University of Cambridge, recently told NewScientist. As a result, renewables are now a significantly better return on investment than fossil fuels. Plus, green energy spending tends to stay local, supporting more localized supply chains and more directly augmenting local incomes than fossil fuels, the report finds.

On top of this, renewables are better suited to rural and developing contexts in some key ways. “Decentralized renewables like solar mini-grids or rooftop panels are also better at reaching more rural areas where grid connections can be pricey and faulty,” summarizes Semafor.

For example, Pakistan is in the throes of a solar-power revolution as residents increasingly turn to solar-plus-battery systems as an affordable and reliable alternative to the spotty, pricey, and often unreachable local grid. Pakistan has quickly become “one of the world’s largest new adopters” of solar power. “The scale of solar being deployed in such a short period of time has not been seen, I think, anywhere ever before,” says Jan Rosenow, who leads the Environmental Change Institute’s energy program at the University of Oxford.

And Pakistan is not alone. Emerging economies are adding renewable capacities at awe-inspiring rates. In recent years, countries including Brazil, Chile, El Salvador, Morocco, Kenya, and Namibia have overtaken the United States in their clean energy transitions, with 63 percent of emerging markets in Africa, Asia, and Latin America now sourcing more of their power generation from solar power than the U.S.

“Some countries are pulling off stunningly fast energy transitions, adding solar so rapidly, it’s become a major source of electricity over the course of years — not decades,” reports CNN.

This shift in the global energy sector comes, in large part, thanks to a flood of cheap renewable energy components from China. While there is some cause for concern that China is becoming increasingly powerful and influential in the energy sectors and overall economies of low- and middle-income countries, cheap Chinese supply chains have also transformed the energy sector in critically valuable ways. Without this access to affordable clean energies, these economies would be unable to develop sustainably without significant financial support. And while Western powers have suggested providing such support themselves, such promises for climate financing have routinely been broken.

Despite continued challenges faced by the clean energy transition and an anti-renewable policy shift in the world’s largest economy, it seems like renewables may simply be too cheap to fail. “We have a plentiful and cheap source of electricity that can be built quickly, almost anywhere in the world,” NewScientist recently posited. “Is it fanciful to imagine that solar could one day power everything?”

By Haley Zaremba for Oilprice.com