The blockade of the Strait of Hormuz earlier this year exposed the vulnerability of fuel-importing economies across Asia, accelerating what analysts describe as a race to generate more power at home. For many governments, renewable energy is increasingly viewed not only as a climate solution but as a strategic asset.
Indonesia has elevated solar development to a national priority, while the Philippines recorded a surge in imports of Chinese solar equipment in the weeks following the conflict. Similar shifts are emerging across the region as policymakers seek to reduce exposure to volatile fuel markets and geopolitical disruptions.
The trend is becoming visible in global electricity markets.
Natural gas accounted for 21.8 percent of global power generation in 2025, down from 23.9 percent in 2020, according to energy think tank Ember. Solar generation expanded by 636 terawatt-hours last year — roughly 17 times the growth contributed by gas — and supplied about three-quarters of new global electricity demand.
China remains the dominant force behind the expansion.
Chinese solar cell and panel exports to Southeast Asia jumped 75 percent from a year earlier in April, while shipments to Africa climbed 83 percent, customs data showed. The gains came even after Beijing ended export tax rebates that had helped keep global solar prices exceptionally low.
The flood of low-cost Chinese equipment has accelerated deployment across emerging markets while simultaneously putting pressure on manufacturers in Europe, North America and parts of Asia. Yet governments appear increasingly willing to tolerate dependence on Chinese hardware if it allows them to build domestic power capacity more quickly.
The urgency is being amplified by a second force: artificial intelligence.
Across Asia, governments and utilities are preparing for a surge in electricity demand from data centers, cloud computing facilities and semiconductor manufacturing complexes. Industry forecasts suggest AI-related power consumption could become one of the largest drivers of electricity demand growth over the next decade.
South Korea offers perhaps the clearest example.
Despite being one of the world's leading technology exporters, South Korea remains a laggard in renewable energy adoption. Its share of renewable electricity generation remains among the lowest in the OECD, reflecting decades of reliance on imported fossil fuels and nuclear power.
Under its first renewable energy master plan unveiled in May, Seoul aims to nearly triple renewable power capacity to 100 gigawatts by 2030 from about 37 GW today. Solar power is expected to account for 57 GW of that total, requiring the installation of roughly 11 GW of new solar capacity annually.
The government also plans to expand domestic solar module production capacity beyond 10 GW per year, develop more than 10 gigawatt-scale solar projects in central regions including the capital area, and strengthen transmission infrastructure needed to integrate new renewable generation.
Lawmakers are simultaneously moving to ease setback regulations that have constrained solar development for years and are advancing legislation that would allow wider deployment of agrivoltaic projects combining agriculture and solar generation.
Additional support may arrive through the tax system.
A production tax credit modeled in part on the U.S. Inflation Reduction Act is currently under review, with a tax code revision expected in July viewed by analysts as one of the most important policy catalysts for the sector this year.
"The renewable energy master plan and the power supply plan are the two pillars for resolving the national tasks of realizing carbon neutrality and securing a stable energy supply," Minister of Climate, Energy and Environment Kim Sung-hwan said during a recent Energy Committee meeting in Seoul.
Financial markets have already begun positioning for the shift.
DS Investment & Securities this week identified HD Hyundai Energy Solution and SK Eternix among its preferred renewable-energy plays, forecasting annual energy-storage demand of 4-6 GW by 2030 and approximately 72.8 trillion won ($48 billion) in grid investment through 2038.
Much of that spending is expected to be driven by AI infrastructure projects, including hyperscale data centers and the massive semiconductor manufacturing cluster under construction in Yongin, south of Seoul.
"Given the policy direction and timing, solar companies stand to gain considerably," said Ahn Joo-won, an analyst at DS Investment & Securities. "What is needed are incentive programs with clearly defined timelines that can support investment visibility for at least five to 10 years."
The European Union last month restricted public funding for solar inverters sourced from what it classified as high-risk countries, including China. The decision affects a market representing more than 14 GW of annual installations and potentially creates openings for suppliers from South Korea, Japan and the United States.
Korean electrical equipment makers such as LS Electric and Hyosung Heavy Industries are viewed as potential beneficiaries, although analysts caution that inverter-specific manufacturing capacity and European certification requirements could limit near-term gains.
Competition from low-cost Chinese producers is unlikely to disappear. Chinese manufacturers continue to dominate global solar supply chains, from polysilicon and wafers to cells and finished modules, allowing them to undercut rivals on price even as governments diversify procurement.
Yet the direction of travel is becoming increasingly clear.
As countries from Indonesia and the Philippines to South Korea and members of the European Union seek to reduce dependence on imported fuels and diversify critical supply chains, solar power is evolving from an environmental policy objective into a strategic component of national security.
For South Korea, the challenge is no longer whether the solar transition is coming. The question is whether the country can move fast enough to secure a meaningful position in one of the fastest-growing energy markets in the world.
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