Which countries could represent the future of wind and solar power?

Investors looking to gain exposure to a rapidly growing wind and solar industry can now analyse which countries are currently nurturing competitive industries, and those that could be competitive in the future¹.

Lombard Odier’s exclusive report – “Predictors of Success in a Greening World”, produced in collaboration with the University of Oxford – provides an in-depth analysis of which countries, regions and economic assets are poised to appreciate as the transition to a green economy unfolds. Investors can use a country’s Green Complexity Index (GCI) score, which measures the composition of a country’s green exports that have resulted in competitive advantages; together with a Green Complexity Potential (GCP) score, which measures each country’s average proximity to complex green products it does not yet export competitively, as a basis for assessment.

A country’s GCI and GCP ranks will have implications for how companies within that country are performing. However, these scores are only one kind of indicator and are not exhaustive or prescriptive when making investment or policy decisions. Countries that have had the greatest deployment of renewables in terms of installed capacity, including China, Germany, and India, now have some of the lowest levelised costs for renewables, despite not having the best sun or wind available resources – suggesting the benefits to be gained from learning-by-doing.

Among renewable energy technology, the development of wind and solar products provides one of the largest contributions to a country’s green competitiveness, as it involves the greatest number of specific green products as inputs in the construction of facilities. Of 62 green products that are involved in renewable energy plants of all types, 17 products are uniquely for wind facilities, and 13 are uniquely used for solar plants. We can therefore measure green complexity based on a subset of green products that are specifically relevant to wind and solar manufacturing.

Country rankings

Countries face very different comparative positions within solar and wind technologies. While a country might have a similar CI for wind and solar relative to their overall GCI, countries may be more specialised in one renewable technology. Countries demonstrate some specialisation between their green complexity in wind or solar, but not equally for both, except in the case of Germany and Denmark. Italy, South Korea, India, and the United States are more specialised in wind relative to solar, and Japan, China, and Sweden are more specialised in solar compared to wind.

Ranking of Countries by Wind CI and Solar CI

Knowing which countries are diversified in the production and manufacture of wind and solar products compared to other types of green products helps investors strategically develop their portfolios in the renewable energy sector.

The full report is available for download by clicking on the download button.

[1] Note that these scores are only one kind of indicator and are by no means exhaustive or prescriptive when making investment or policy decisions

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