Abstract
Rapid economic growth has caused many environmental problems in China, resulting in international pressure on China to fight against climate change and to shift to a more environmentally friendly economy. Therefore, over the past decades, China has been working on transforming its economy to counter the concerns of different environmental hazards caused by the burning fossil fuels and rising oil imports to support the energy sector. This study explores the shift in the Chinese government's policies towards a low-carbon economy by adopting more environmentally friendly solar energy. A cost-benefit analysis of the solar water heater industry in China indicates that it not only brings economic benefits to society but also environmental benefits to the earth. Furthermore, this paper focuses on the use of solar energy as a kind of renewable energy, as solar energy is plentiful, which is beneficial from both an environmental and economic perspective.