"China is already big in renewables. In 5 years time we see them as a world leader in this department," Chistopher Flavin, president of the US-based Worldwatch Institute, told Reuters on the sidelines of an energy conference in Johannesburg.

"Already, 35 million homes in China get their hot water from solar collectors. That is more than the rest of the world combined," he said.

Renewable energy is derived from sources that are continually replaced, unlike fossil fuels of which there is a finite supply. Most renewables are non-polluting. "There are prospects for real take-offs in solar and wind power in China, and not just hot water for homes but in industry," said Flavin.

"State-owned industries and private companies there are investing heavily in renewables," he said.

Sky-high world oil prices have partly been attributed to surging demand from China and the country's overall record on the environment has many greens seeing red.

But Flavin said the rapid growth in oil imports and related costs was making China look for alternatives.

He also said the country was grappling with mounting health and social costs from pollution as well as an energy crisis that has seen rolling black outs.

Flavin earlier told the conference that renewable energy was rapidly growing on a global scale, albeit from a low base compared to fossil fuels.

He said that wind power had an annual average growth rate of about 30 percent from 1994 to 2004, while solar energy had seen yearly growth of close to 25 percent over the same period.

He also said that the costs from such energy sources were falling fast, noting that wind power in 1980 cost 46 cents a kilowatt hour but now cost less than 6 cents.