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The Economy in the 2026 Renewables-Based Economy

The global renewable energy transition is increasingly becoming an economic transformation. Expanding solar energy, wind energy, electrification, grids, and energy storage are attracting major investment, supporting new industries, reshaping global supply chains, and creating opportunities for economic growth and industrial development.

In a Renewables-Based Economy (RBE), renewable energy becomes part of the economic structure rather than simply an energy source. It influences industrial production, trade, domestic value chains, employment, and investment, while reducing exposure to fossil fuel markets and creating new opportunities for long-term economic resilience and competitiveness.

The scale of this economic transformation is already significant. Around USD 1.6 trillion was invested in renewable energy and enabling infrastructure in 2025, including USD 893 billion in electrified transport. Renewable energy supported 16.6 million jobs globally in 2024, while renewable-related trade measures reached 212 by 2024.

In this article, we will explore the Economy dimension of the REN21 RBE Tracker 2026, examining renewable energy investment, economic value creation, trade and fiscal policies, employment, workforce development, and the broader economic changes shaping the transition towards a renewables-based economy.

Renewable energy is driving investment, industrial development, employment, trade, and economic growth worldwide.

1. Renewable Energy Investment and Finance

Investment provides a key measure of the scale and direction of the energy transition. However, where capital flows across renewable generation, electrification, grids, storage, and emerging technologies is equally important.

• Investment in the renewables-based economy has reached a major scale: Around USD 1.6 trillion was invested in renewable energy and enabling infrastructure in 2025. Renewables, electrification, grids, and storage are increasingly becoming important drivers of economic activity, industrial development, and investment.




• Electrified transport attracted the largest investment: Investment in electrified transport reached approximately USD 893 billion in 2025, exceeding all other low-emission technology categories. Strong policy support, falling technology costs, and growing consumer adoption have helped direct substantial capital towards electric vehicles and charging infrastructure.




• Renewable energy remained a major investment category: Global renewable energy investment reached approximately USD 690 billion in 2025. Although still substantial, REN21 notes that renewable energy investment declined during the year, contrasting with the continued expansion seen across several other low-emission technologies.




• Grid investment is growing but remains below electrified transport: Investment in power grids reached around USD 483 billion in 2025, while utility-scale battery storage attracted approximately USD 71 billion. This uneven distribution of capital highlights the challenge of expanding enabling infrastructure alongside rapidly growing renewable generation and electricity demand.




• Investment remains uneven across emerging technologies: Heat pumps attracted around USD 84 billion in 2025, compared with approximately USD 34 billion for clean industry, USD 7 billion for clean hydrogen, and only USD 4 billion for clean shipping, showing substantial differences in investment maturity across technologies.




• Financing conditions create major differences between countries: Higher-income economies generally benefit from lower financing costs, while lower-income economies face higher costs of capital due to factors such as currency volatility, limited access to affordable finance, and higher perceived risk. These conditions can slow renewable deployment where growth potential is often greatest.

Global renewable energy and enabling infrastructure investment reached USD 1.6 trillion in 2025.

2. Trade, Subsidies and Fiscal Policies

Government fiscal and trade policies increasingly influence the economics of renewable energy. Subsidies, tariffs, trade agreements, and industrial measures can accelerate deployment while also reshaping technology supply chains and international competition.

• Fossil fuel subsidies remain substantially higher than renewable support: Despite expanding renewable energy deployment, government support for fossil fuels continues to exceed renewable energy subsidies across major economies. This creates an uneven economic environment and can weaken the price signals intended to encourage investment in cleaner energy systems.




• The wider economic cost of fossil fuels extends beyond direct subsidies: REN21 notes that estimates of direct fossil fuel subsidies do not capture broader societal costs associated with climate change, pollution, and health impacts. Including these effects, fossil fuel costs were estimated at approximately USD 6.7 trillion in 2024.




• Renewable energy trade policies have expanded dramatically: Formal trade measures covering renewable energy and enabling technologies increased from only 9 measures in 2015 to 212 in 2024, more than doubling from 2022. This rapid increase reflects the growing strategic importance of renewable technologies in international trade and industrial policy.




• Trade measures increasingly target key transition technologies: By 2024, more than 50 trade policies related to solar PV and more than 50 covered battery components, while 47 addressed electric vehicles, 32 wind turbines, and 16 heat pumps. Renewable technology supply chains are therefore becoming an important area of global economic competition.




• Tariffs and export controls are becoming more important: Nearly 40% of new trade policies introduced since 2020 involved tariff changes, anti-dumping measures, or countervailing duties. At the same time, around half of energy-related critical minerals are subject to export controls, adding another strategic dimension to renewable energy supply chains.




• International trade cooperation continues alongside protection measures: Around 50 new free trade agreements were signed over the same period, with most maintaining preferential tariffs for renewable energy and enabling technologies. The transition is therefore producing both greater international cooperation and stronger competition over technologies, manufacturing, and critical materials.

3. Renewables and Economic Value Creation

Renewable energy creates economic value far beyond electricity generation. Manufacturing, construction, services, infrastructure, reduced fuel imports, and lower energy costs can spread economic benefits across industries and strengthen domestic competitiveness.

• Renewables create value across multiple parts of the economy: Direct economic activity comes from constructing, installing, operating, and manufacturing renewable energy assets. Additional value is created through supply chains involving materials, transport, engineering, finance, digital services, maintenance, and other industries supporting renewable energy deployment.




• Wider economic benefits extend beyond the renewable energy industry: Renewable deployment can increase household spending through employment, reduce energy costs for businesses and consumers, improve trade balances by avoiding fossil fuel imports, and strengthen industrial competitiveness through access to lower-cost electricity.




• Investment does not automatically translate into domestic economic value: Gross investment figures can overstate local benefits when renewable projects depend heavily on imported technologies, equipment, or foreign services. The economic impact therefore depends partly on how much manufacturing, engineering, construction, operation, and other activity occurs within the domestic economy.




• The economic contribution of renewables may also be underestimated: Conventional assessments often fail to capture upstream industries, long-term operation and maintenance, electricity price effects, avoided fossil fuel imports, tax revenues, and wider economic spillovers. Renewable energy can therefore create considerably more value than project investment figures alone suggest.




• Renewables can make a measurable contribution to national economies: Available estimates indicate that environmental and renewables-related sectors can contribute several percentage points of GDP in countries with strong domestic industries and supply chains. However, differences in national accounting methodologies make direct comparisons between countries difficult.




• Better economic measurement is needed: More accurate assessment requires improved renewable energy accounts, industrial and trade statistics, and better tracking of domestic value creation across manufacturing, services, infrastructure, public revenues, and exports. This would provide a clearer picture of renewables' contribution to economic growth, competitiveness, and resilience.

4. Renewable Energy Employment

Renewable energy is becoming an increasingly important source of global employment. Jobs now extend across manufacturing, construction, installation, operation, and maintenance, although employment remains concentrated in particular technologies and countries.

• Renewable energy employment reached a new high: Global renewable energy employment reached approximately 16.6 million jobs in 2024, rising from around 11 million in 2017. These include direct jobs in renewable energy activities as well as indirect employment created throughout supporting supply chains.




• Renewables now represent a significant part of energy-sector employment: Renewable energy jobs accounted for around one in five energy-sector jobs worldwide in 2024. Their share has increased as renewable technologies, manufacturing, installation, and supporting industries have expanded across the global energy economy.




• Solar PV is the largest renewable energy employer: Solar PV supported more than 7 million jobs in 2024, representing over 40% of total renewable energy employment. Its workforce spans equipment manufacturing, project construction, installation, and long-term operation and maintenance.




• Other renewable technologies support millions of additional jobs: Bioenergy employed around 3.7 million people in 2024, while hydropower supported just over 2.2 million jobs. Wind energy employment increased to nearly 2 million jobs, while solar heating and cooling accounted for approximately 0.59 million.




• Renewable energy jobs remain geographically concentrated: China accounted for approximately 43.9% of global renewable energy employment in 2024. Its strong manufacturing ecosystem and cost advantages contribute significantly to this concentration, particularly in renewable technology manufacturing and associated supply chains.




• Employment growth does not always follow capacity growth at the same rate: Despite record renewable capacity additions, employment growth has slowed as labour productivity, economies of scale, and automation have increased, particularly in China. Renewable deployment nevertheless continues to create substantial employment opportunities across many other countries.

Global renewable energy employment reached 16.6 million jobs in 2024, led by solar PV, bioenergy, hydropower, and wind energy.

5. Workforce Diversity and Inclusion

Employment growth alone does not guarantee an inclusive renewables-based economy. Workforce participation differs across occupations, employers, technologies, and regions, making diversity and equal access to renewable energy opportunities important economic considerations.

• Women remain underrepresented in renewable energy employment: Women accounted for approximately 32% of renewable energy jobs, compared with around 43% across the global economy. Although renewables perform better than the oil and gas sector, where women represent about 23% of employment, a significant participation gap remains.




• Women's participation varies considerably by activity: Women represented around 40% of renewable energy policy and administration positions as of 2025, compared with 32% in sales and distribution, 27% among project developers, 27% in operation and maintenance, 26% among service providers, and only 25% in manufacturing.




• Technical and industrial roles show the largest participation gaps: Women's representation falls to approximately one-quarter of employment in manufacturing, operation, and maintenance. Expanding access to technical education, engineering skills, vocational training, and career development is therefore important as renewable industries continue to grow.




• The type of employer also affects workforce diversity: Women's participation is highest in renewable energy associations and public enterprises and lowest in private companies. This shows that workforce inclusion depends not only on technology deployment but also on employment structures and organisational practices across the renewable energy value chain.




• Employment opportunities remain unevenly distributed geographically: Renewable energy jobs are concentrated across particular countries, technologies, and value chains, while limited access to training infrastructure can further restrict participation in some regions. More locally anchored skills development can help distribute the economic benefits of renewable energy more widely.




• An inclusive workforce strengthens the wider economic transition: Policies, education, and training can expand participation among underrepresented groups while helping renewable industries access a broader pool of skills and talent. Building a renewables-based economy therefore involves not only creating jobs, but also improving access to the opportunities created by the transition.

6. Workforce Transition and Reskilling

A renewables-based economy requires workers to transition alongside technologies and industries. Reskilling, technical education, and workforce planning are therefore essential for connecting renewable energy growth with durable employment and economic development.

• Worker reskilling is becoming part of energy-transition policy: REN21 identified 52 policies worldwide supporting worker reskilling. These initiatives reflect growing recognition that expanding renewable industries requires coordinated workforce development as workers move between conventional and emerging energy sectors.




• Reskilling must connect workers with real employment opportunities: Effective programmes need to respond to labour-market demand and provide skills that match emerging renewable energy occupations. Training alone does not guarantee successful workforce transition unless it leads to stable, long-term employment within growing industries and value chains.




• Workforce transition requires both technical and engineering skills: Renewable energy expansion creates demand for workers across manufacturing, construction, installation, operation, maintenance, engineering, and supporting services. Education and vocational training therefore need to develop alongside renewable deployment and industrial development.




• Countries are beginning to develop dedicated transition programmes: The United Kingdom's 2025 Clean Energy Jobs Plan includes financial support for transitioning North Sea workers and an Engineering Skills Package, while Viet Nam has committed to training and retraining workers affected by the transition from coal-fired power generation.




• Developing economies are also integrating reskilling into transition planning: South Africa had five reskilling policies as of 2026, including its Just Energy Transition Implementation Plan 2023–2027. Such programmes can help connect energy-transition objectives with workforce development and affected communities.




• Important information gaps still remain: Although renewable employment figures are increasingly tracked, less is known about job quality, skills alignment, and the effectiveness of reskilling programmes. Better data are needed to determine whether these initiatives reach affected workers and produce stable employment across the renewable energy value chain.

Technical training and reskilling prepare workers for new roles across the renewable energy economy.

Related articles

• Renewables-Based Economy (RBE) - 2026: Energy Systems and Energy Security

Summary

The transition towards a Renewables-Based Economy is increasingly reshaping investment, trade, industrial activity, and employment. With USD 1.6 trillion invested in renewable energy and enabling infrastructure in 2025 and 16.6 million renewable energy jobs worldwide in 2024, renewables are becoming an important part of the global economy.

However, investment and deployment alone do not guarantee broad economic benefits. Building a resilient renewables-based economy also requires stronger domestic value creation, inclusive employment, competitive supply chains, affordable finance, and effective workforce reskilling to ensure that economic opportunities created by the energy transition are distributed more widely.

Frequently Asked Questions

Q1: What is the economic role of renewable energy in a renewables-based economy?

A1: Renewable energy becomes part of the wider economic structure by influencing investment, industrial production, trade, domestic value chains, employment, and competitiveness. Its economic impact therefore extends well beyond the generation and sale of renewable electricity.

Q2: How much was invested in renewable energy and enabling infrastructure in 2025?

A2: Around USD 1.6 trillion was invested globally in renewable energy and enabling infrastructure in 2025. Major investment areas included renewable energy, electrified transport, power grids, battery storage, and other technologies supporting the transition towards a renewables-based economy.

Q3: How does renewable energy create economic value beyond investment?

A3: Renewable energy creates value through manufacturing, construction, engineering, operation and maintenance, supply chains, and supporting services. Wider benefits can include reduced fossil fuel imports, lower energy costs, improved trade balances, tax revenues, employment creation, and stronger industrial competitiveness.

Q4: How many people work in renewable energy worldwide?

A4: Global renewable energy employment reached approximately 16.6 million jobs in 2024, compared with around 11 million in 2017. Solar PV was the largest employer, supporting more than 7 million jobs and accounting for over 40% of global renewable energy employment.

Q5: Why are workforce transition and reskilling important for a renewables-based economy?

A5: Expanding renewable industries requires workers with appropriate technical, engineering, manufacturing, installation, and maintenance skills. Reskilling can help workers transition from conventional energy industries into emerging sectors, although training must align with actual labour-market demand and provide durable employment opportunities.