Onshore vs Offshore Wind in China: Better Investment for Foreigners?
China installed 52 GW of onshore wind and 24 GW of offshore wind capacity in 2025, making it the world’s largest market for both technologies, according to the Global Wind Energy Council (GWEC). For foreign investors evaluating China’s wind energy sector, the choice between onshore and offshore wind involves fundamentally different capital requirements, risk profiles, regulatory environments, and technology needs. The two sub-sectors have diverged significantly since 2023, with offshore wind experiencing policy-driven acceleration while onshore wind consolidates in established markets.
This comparison examines onshore and offshore wind energy investment in China from the perspective of foreign firms, analyzing market dynamics, licensing requirements, technology opportunities, cost structures, and return profiles. The analysis incorporates 2024-2026 NEA statistics, provincial tender results, and the experiences of European and American wind energy companies currently operating in China.
Market Structure and Capacity Growth
China’s wind energy market is the world’s largest by cumulative capacity, but onshore and offshore wind are following very different growth trajectories. Onshore wind capacity additions have stabilized at 50-55 GW per year — near the maximum that grid integration and land availability permit. Offshore wind, by contrast, is in an acceleration phase, with annual installations expected to reach 35-40 GW by 2028.
| Metric | Onshore Wind (2025) | Offshore Wind (2025) |
|---|---|---|
| Cumulative installed capacity | 478 GW | 42 GW |
| New additions (2025) | 52 GW | 24 GW |
| Average project size | 50-200 MW | 500-2,000 MW |
| Capacity factor | 22-30% | 35-50% |
| LCOE (2025) | RMB 0.28-0.38/kWh | RMB 0.45-0.60/kWh |
| Provincial concentration | Inner Mongolia, Xinjiang, Gansu, Hebei | Guangdong, Zhejiang, Shandong, Fujian |
| Grid connection rate | ~96% | ~88% (curtailment improvements ongoing) |
Foreign Investment Access and Licensing
The regulatory environment for foreign wind energy investment differs substantially between onshore and offshore. Onshore wind development and turbine manufacturing are fully open to foreign investment since the 2024 Negative List revision — there are no ownership caps, equity requirements, or technology transfer mandates. Foreign firms can establish WFOEs for onshore wind farm development, turbine manufacturing, or O&M services without Chinese partner requirements.
Offshore wind project development presents additional regulatory complexity. While turbine manufacturing is fully open to foreign ownership, offshore wind farm development requires multiple licenses that may involve Chinese state-owned enterprises (SOEs) as de facto partners. The key licenses include:
- Sea area use right — Granted by the provincial Department of Natural Resources. Foreign-invested enterprises can apply directly, but the approval process favors applicants with demonstrated marine engineering experience
- Grid connection agreement — Negotiated with State Grid Corporation of China or China Southern Grid. SOE relationships significantly influence connection timelines and curtailment arrangements
- Offshore safety and navigation permit — Issued by the Maritime Safety Administration. Standard application process with no foreign restrictions
- Environmental impact assessment — Required for all offshore projects. Foreign firms must engage Chinese EIA-certified agencies for the assessment
- Submarine cable construction permit — Requires coordination with multiple provincial agencies and existing cable operators
Technology Opportunities for Foreign Firms
Foreign technology companies have different opportunity profiles in each sub-sector. In onshore wind, the domestic turbine manufacturers (Goldwind, Envision, Mingyang) dominate with over 90% market share. Foreign turbine manufacturers — Vestas, Siemens Gamesa, GE — have struggled to compete on price in the onshore market, where Chinese turbines cost 30-40% less than equivalent European products on a per-MW basis.
However, foreign firms have found strong demand for specific technology areas:
| Technology Area | Onshore Opportunity | Offshore Opportunity |
|---|---|---|
| Large turbine design (>10 MW onshore, >15 MW offshore) | Moderate — Chinese OEMs developing own designs | High — foreign expertise in large-turbine reliability valued |
| Advanced blade materials (carbon fiber, recyclable resins) | High — Chinese OEMs seek foreign material suppliers | High — longer blades require advanced materials |
| Floating wind foundations | N/A | Very high — China has 5 demonstration projects underway, foreign expertise critical |
| Condition monitoring and predictive maintenance | High — 90 GW+ aging fleet needs upgrades | Moderate — younger fleet, growing need |
| Subsea cables and offshore substations | N/A | High — Chinese manufacturers capacity-constrained |
| Wind resource assessment and micro-siting | Moderate — domestic consultants adequate | High — complex offshore conditions require specialized expertise |
Capital Requirements and ROI Profiles
The capital requirements for onshore and offshore wind investments differ by an order of magnitude. A typical 100 MW onshore wind farm requires total investment of approximately RMB 600-800 million (USD 85-110 million), with construction timelines of 12-18 months. A comparable 500 MW offshore wind farm requires RMB 3.5-5 billion (USD 500-700 million) with construction timelines of 24-36 months.
Onshore wind returns: Internal rates of return (IRR) for onshore wind projects in China have compressed from 10-12% in 2020 to 7-9% in 2025, driven by declining feed-in premiums and rising curtailment rates in high-wind provinces. Projects in Inner Mongolia and Xinjiang face particular pressure, with curtailment rates of 5-8% reducing effective operating hours.
Offshore wind returns: Despite higher LCOE, offshore wind projects benefit from higher capacity factors (35-50% vs 22-30%) and provincial top-up subsidies that bridge the gap to coal benchmark prices. Typical IRRs for offshore wind projects commissioned in 2024-2025 range from 6.5-8.5%, with projects in Fujian and Guangdong performing at the higher end due to better wind resources and stronger provincial support.
Policy Support Trajectory
Onshore wind is now fully subsidy-free (grid parity since 2023), which provides policy stability but limits upside from subsidy extensions. The central government’s Renewable Energy Law (2025 amendment) guarantees priority dispatch for renewable energy, but implementation at the provincial level remains uneven.
Offshore wind benefits from more aggressive policy support. The National Energy Administration’s 2024-2028 Offshore Wind Development Plan targets 80 GW of cumulative offshore capacity by 2028 and 150 GW by 2032. Provincial governments in Guangdong, Jiangsu, Zhejiang, and Shandong have announced subsidy programs totaling over RMB 45 billion for offshore wind development through 2028, including capacity payments per MW and production top-ups per kWh.
Risk Comparison
- Grid curtailment risk: Higher for onshore (5-8% in top provinces) than offshore (2-4%)
- Construction risk: Lower for onshore (simple logistics) than offshore (weather, marine logistics, specialized vessels)
- Technology risk: Lower for onshore (proven 6-8 MW turbines) than offshore (rapidly scaling to 15-18 MW, less track record)
- Regulatory risk: Similar for both — stable framework with provincial variation
- Foreign firm competitive position: Stronger in offshore (technology differentiation) than onshore (price-focused market)
- Exit liquidity: Higher for onshore (many buyers for operational wind farms) than offshore (fewer qualified buyers for large assets)
Risk comparison summary for foreign investors: Onshore wind presents lower capital requirements but higher curtailment risk and more intense price competition from domestic turbine manufacturers. Offshore wind requires significantly larger investment but offers better capacity factors, stronger provincial policy support, and more opportunities for technology differentiation by foreign firms. The choice ultimately depends on the foreign investor’s risk appetite, capital capacity, and technology advantages. For mid-sized foreign clean energy companies with annual revenue under USD 500 million, onshore wind through a technology supply or O&M services model is generally the more accessible entry point. For large multinational energy companies with offshore wind development experience, the offshore market offers superior long-term growth potential despite higher upfront capital requirements. Either way, foreign firms entering China’s wind energy market should plan for a minimum 3-5 year investment horizon to allow for regulatory navigation, partner relationship development, and technology certification — regardless of whether they target onshore or offshore projects.
Decision Framework: Onshore vs Offshore Wind for Foreign Investors
Choose onshore wind if: You are looking for smaller, faster projects with proven technology and shorter construction timelines; you have experience operating in China’s northern and western provinces; you want to invest through existing wind farm acquisition rather than greenfield development; or you supply technology/services that apply to the operating fleet (O&M, monitoring, blade repair).
Foreign firm case study: European O&M provider in onshore wind. A Danish wind turbine maintenance company entered the Chinese market in 2022 through a WFOE structure, providing specialized blade inspection and repair services to Chinese wind farm operators. Within three years, the company had secured contracts covering 8 GW of installed capacity across Inner Mongolia, Xinjiang, and Hebei. The key to its success was technology differentiation — its proprietary drone-based blade inspection system detected defects at 92% accuracy compared to the 65-70% accuracy of traditional visual inspection methods used by domestic competitors. The company now plans to expand into offshore wind O&M services, leveraging its technology platform and the relationships built through onshore contracts.
Choose offshore wind if: Your company has deep expertise in large-scale marine project development; you bring proprietary floating wind, subsea cable, or offshore substation technology; you have a longer investment horizon (15-20 years) and are comfortable with larger capital commitments; or you want to participate in China’s fastest-growing clean energy sub-sector.
Where to Go From Here
Based on what you just read:
- Ready to act? Read a step-by-step guide to licensing an offshore wind project in China
- Still comparing? See a comprehensive comparison of China wind energy investment structures
- Need numbers? Try an interactive wind energy ROI calculator for China market
Onshore vs Offshore Wind in China: Better Investment for Foreigners? — first published on China Gateway 360. Last updated: July 2026.
