China green energy investment makes sense

Lay and Wai-Keung Tang, also of Emeritus, think China is doing it out of self-interest.

Tang thinks one of the biggest concerns of the Chinese government is pollution. China knows that it cannot keep on powering a population of 1.3 billion by burning fossil fuels like coal, which is one of the more environmentally damaging sources of energy.

Lay added that if China were to fully industrialize without green energy - like the way the U.S. and U.K. did - it would be devastating for the domestic and global environment. The Chinese government knows this and will likely avoid this path for its own sake.

A second aspect is probably cost.

For renewable energy products, the break-even point, i.e. how fast it will save enough energy to compensate for the cost of making it, depends on how long the time frame is.

Right now, cutting-edge commercial solar panels have solar energy conversion efficiencies approaching 50 percent, which makes the break-even time about eight to ten years, said Tang.

The Chinese (and other Asian governments) are known for their long-sighted thinking, so ten years is certainly a reasonable time-frame. Furthermore, as conversion rates push higher, the break-even time will shorten.

Being in the green energy game, therefore, will only become more and more beneficial as time goes on.

Some speculate that a third reason is reducing oil dependence, a theory that Tang thinks has some merit.