Why do some countries push renewables while others do not?
“Germany and China have expanded renewables so much — why is Japan behind?” “US climate policy swings with every administration.” “Within Europe, why is Poland on coal and Denmark on wind?” Deployment differs between countries by factors of several, and the reasons are often dismissed with vague phrases about political will or national character.
The short answer. No single factor explains it, but five axes give the basic picture: (1) resource endowment and dependence on fossil fuels, (2) the quality of policy design and its long-term predictability, (3) existing market structure and incumbent interests, (4) social acceptance and arrangements for local participation, and (5) integration with finance and industrial policy. Countries that moved fast did not happen to be windy or environmentally minded; they built these conditions deliberately. Countries that lag are mostly well endowed but held back by institutional design and political economy. What follows sets out that structure with data from the IEA, IRENA and Ember, and with policy cases from Germany’s Energiewende to the US Inflation Reduction Act.
The international gap: more than tenfold
Start with the facts. On Ember’s 2024 data, wind and solar as a share of generation in 2023 were 67% in Denmark, 44% in Uruguay, 33% in Germany, 32% in the United Kingdom, 31% in Spain, 30% in Portugal and 30% in the Netherlands — 30 to 70% at the top. Meanwhile the United States was at 16%, China 16%, South Korea 5%, Japan 12%, Russia 0.5% and Saudi Arabia 1% (Ember, 2024). Ten to a hundred times separates the top from the bottom.
Counting hydro, countries with large hydro resources — Iceland, Norway, Brazil, Canada — were already at 80–100% renewable. But the growth since the 2010s has been driven by wind and solar, and the speed of deploying these new renewables is what reflects the quality of a country’s policy. What matters most is that the gaps are wide even between countries at similar levels of development and in similar climates. Japan and the UK are alike in latitude, economic size and being islands, yet the UK cut power sector CO₂ by 74% between 2012 and 2023 against Japan’s 24%. “Japan has no resources” does not survive the comparison.
Policy design: long-term predictability and well-made incentives
The largest explanatory variable is the quality of policy design. Germany’s Renewable Energy Sources Act of 2000 introduced a feed-in tariff that promised investors a fixed price for twenty years. Private investment poured into solar and wind, and installed capacity grew more than sixtyfold from 2000 to 2023 (BMWK, 2024). The core of that success was not a high tariff but the predictability of a government that keeps its promise for twenty years.
The US Inflation Reduction Act works on the same principle. Enacted in 2022, it provides production and investment tax credits stably for more than a decade, and allows them to be stacked with bonuses for domestic content, energy communities and prevailing wages, reaching total credits above 70%. Within two years it had brought announcements of about 400,000 clean energy jobs and US$493 billion of investment, most of it, ironically, in Republican states (E2, 2024).
Where policy swings on short cycles, by contrast, investment does not take root. Spain built one of the world’s largest solar markets by 2008, then cut tariffs retroactively between 2010 and 2013, lost investor confidence, and saw its market stall for more than a decade. Japan, after introducing its FIT in 2012, cut prices sharply and complicated the framework by moving to auctions and then to a feed-in premium, which critics say has undermined predictability for developers. Frequent institutional change is itself a risk premium on investment, and it slows deployment.
Market structure and incumbent interests
The second axis is the structure of the electricity market and the interests within it. Renewables suit distributed, small-scale, locally owned generation, while twentieth-century power systems were designed around large central plants, vertical integration and a few dominant firms. Without reforming that structure, new entrants do not grow.
Germany liberalised its market in 1998, unbundled transmission from generation and retail, and built arrangements through which citizens, farmers and cooperatives could enter as community energy. By 2020, about 40% of German renewable capacity was owned by citizens, farmers and local cooperatives — the base of the transition’s political durability (IRENA, 2020).
Where vertically integrated incumbents dominate both the market and policy, deployment lags. In Japan, despite retail liberalisation in 2016 and legal unbundling in 2020, the former general electricity utilities remain dominant in system operation and in the capacity and balancing markets, leaving new renewable entrants disadvantaged by connection costs and curtailment. Renewable output is curtailed dozens of times a year in Kyushu, Tohoku and Shikoku, which undermines project economics structurally.
The lobbying power of the fossil industry is decisive too. The US Republican Party, Australia’s Liberal Party, the Polish government and the Saudi government all depend heavily on coal, oil and gas for employment and revenue, which makes expanding renewables politically hard. Industrial and political structure determines policy preference endogenously. RMI calls this fossil fuel incrementalism — the strategy of delaying real decarbonisation behind the language of a necessary but careful transition (Butler-Sloss et al., 2026).
Social acceptance: landscape, fairness and trust
The third axis is social acceptance. Wüstenhagen et al. (2007) framed deployment as depending on a triangle: socio-political acceptance, community acceptance and market acceptance, all at once. Opinion polls put support for renewables at 70–80% almost everywhere, and yet a specific wind farm or solar development meets local opposition. That paradox of support and opposition only makes sense once the three layers are kept apart.
NIMBY opposition is rarely simple selfishness. Research repeatedly finds it expresses procedural justice (could people take part in the decision?), distributive justice (are benefits and costs shared locally?) and trust (can the developer and the authorities be believed?). Denmark, Germany and Sweden moved early on wind because they built arrangements for residents to invest in, own and operate projects from the beginning. Where the dominant model is outside capital bringing a large project into a community, opposition becomes routine and permitting takes years, sometimes a decade.
Japan is notorious for the length of its permitting. Offshore wind has begun to improve with zoning under the marine renewable energy act, but fishing rights, landscape and environmental assessment still take five to seven years. Taiwan and the UK build large offshore projects in three to four years because they have institutionalised early consultation with fishers and residents, and mechanisms for sharing benefits (Chang et al., 2026).
Integration with finance and industrial policy
The fourth axis is how far renewables are integrated with finance and industrial policy. China is often described as having expanded renewables for the climate; in fact it placed solar, wind, EVs and batteries at the centre of industrial, employment and export strategy. China holds more than 80% of world solar module manufacturing, more than 70% of lithium-ion batteries and more than 60% of EVs, and module prices fell about 90% between 2010 and 2024 (IEA, 2024). Chinese expansion aims less at domestic emissions than at economic dominance through control of world supply.
In response, the United States passed the IRA and the EU the Net-Zero Industry Act and Critical Raw Materials Act, repositioning renewables at the intersection of climate and industrial policy. Japan’s GX promotion act belongs to the same family, but at a fraction of the IRA’s scale and with weaker long-term predictability. National priorities show up in the size of the fiscal commitment and the stability of the rules.
Financial maturity matters as well. Where green bond markets, climate-related disclosure and pension fund ESG investment are developed — the EU, the UK, the Nordics, some US states — renewables reach low-risk, low-cost capital, which lowers their levelised cost. The difference between a 2% and an 8% cost of capital changes solar and wind LCOE by a factor of two (IRENA, 2024). The main reason deployment lags in developing countries is not technology but the cost of capital, which is a question of financial institutions and sovereign credit.
Objections and limits: institutions are not the whole story
Some caveats. First, resource endowments do differ. The winds of the North Sea and the Nordics, the sun of the Sahara and the Middle East, Iceland’s geothermal heat cannot be copied. But solar and wind, geothermal aside, are now cheap enough to work economically in most countries, and there is essentially no country left that can claim it lacks the resource. Japan has the world’s sixth largest exclusive economic zone, with theoretical offshore wind potential above 1,500 GW — several times annual electricity demand (NEDO, 2020).
Second, the democracy–autocracy distinction is not simple. China, an autocracy, expanded renewables rapidly; Saudi Arabia and Russia, also autocracies, have barely expanded at all. Denmark and Germany, democracies, led; the United States and Canada, democracies, have wavered. What decides is whether renewables were adopted as national strategy, not the political system.
Third, there is a trade-off between moving first and moving later. Countries that deployed early at high tariffs — Germany, Spain, Japan — carry a heavier burden on consumers and now face political backlash. Later movers install cheap solar, wind and storage and enjoy the advantage of starting late, which is why leapfrogging is happening in developing countries.
Where Japan stands
Japan has the conditions to expand — resources in offshore wind and geothermal, technical depth in power electronics and batteries, financial markets, a manufacturing base — and is held back by five bottlenecks: frequent policy change, structural distortions in the electricity market, slow permitting, weak local participation, and separation from industrial policy. The seventh Strategic Energy Plan (2025) sets 40–50% renewables and 30–45 GW of offshore wind, and reaching those targets requires institutional design as fine-grained as Germany’s, America’s or Britain’s.
There are grounds for optimism. Falling costs and S-curve adoption dynamics in solar, wind and storage can no longer be stopped, and countries whose policy lags will be dragged along by economics (Seba, 2014; RMI, 2023). International carbon pricing pressure, through the EU’s border adjustment and climate clubs, works the same way. What remains at issue is not direction but speed and fairness.
Summary
- Differences between countries can be read along five axes: (1) resource endowment, (2) the predictability of policy, (3) market structure and incumbent interests, (4) social acceptance and local participation, and (5) integration with finance and industrial policy.
- The leaders — Germany, Denmark, the UK, Spain — grew because they deliberately assembled long-term tariffs, community ownership, market liberalisation and industrial policy.
- Most laggards are held back not by resources but by incumbent fossil interests and unstable policy.
- China, the United States and the EU show that renewables are now treated as industrial policy and geopolitics, not climate policy.
- Japan has the resources and the technology, and its institutions and political economy are what hold it back. Breaking through requires reform on three fronts: predictability, local participation and integration with industrial policy.
The answer to why some countries push renewables and others do not comes down to this: not resources, not national character, but institutional design and political-economic choice. The countries that have grown renewables are the countries that built the institutions to grow them. Which also means that any country can still catch up, by changing its institutions.
References and data sources
International generation mix
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Ember. (2024). Global Electricity Review 2024. Ember Climate.
https://ember-climate.org/insights/research/global-electricity-review-2024/
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International Energy Agency. (2024). Renewables 2024: Analysis and Forecasts to 2030. IEA.
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IRENA. (2024). Renewable Power Generation Costs in 2023. International Renewable Energy Agency.
https://www.irena.org/Publications/2024/Sep/Renewable-Power-Generation-Costs-in-2023
National policy cases
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Bundesministerium für Wirtschaft und Klimaschutz (BMWK). (2024). Erneuerbare Energien in Zahlen 2023. BMWK.
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E2 (Environmental Entrepreneurs). (2024). Clean Economy Works: Two Years of the Inflation Reduction Act. E2.
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Department for Energy Security and Net Zero (UK). (2024). Digest of UK Energy Statistics (DUKES) 2024. UK Government.
https://www.gov.uk/government/statistics/digest-of-uk-energy-statistics-dukes-2024
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European Commission. (2023). Net-Zero Industry Act: Proposal for a Regulation. European Commission.
Social acceptance and community energy
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Wüstenhagen, R., Wolsink, M., & Bürer, M. J. (2007). Social acceptance of renewable energy innovation: An introduction to the concept. Energy Policy, 35(5), 2683–2691.
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IRENA Coalition for Action. (2020). Stimulating Investment in Community Energy: Broadening the Ownership of Renewables. IRENA.
https://www.irena.org/publications/2020/Dec/Stimulating-investment-in-community-energy
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Chang, Y., Hsu, A. C., & Lin, W. (2026). Offshore wind stakeholders and trust-building in Taiwan. Energy Research & Social Science.
Industrial policy and cost structure
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International Energy Agency. (2024). Energy Technology Perspectives 2024: Clean Energy Manufacturing. IEA.
https://www.iea.org/reports/energy-technology-perspectives-2024
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Rocky Mountain Institute (RMI). (2023). X-Change: Electricity — On Track for Disruption. RMI.
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Seba, T. (2014). Clean Disruption of Energy and Transportation. Clean Planet Ventures.
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Butler-Sloss, S., et al. (2026). The Twin Fossil Shock. Carbon Tracker / RMI.
Japanese data
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Agency for Natural Resources and Energy, METI. (2025). Seventh Strategic Energy Plan [in Japanese].
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Agency for Natural Resources and Energy, METI. (2024). Energy supply and demand in FY2023 (final figures) [in Japanese].
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New Energy and Industrial Technology Development Organization (NEDO). (2020). Assessment of Japan’s offshore wind potential [in Japanese]. NEDO.