One purpose of stimulating financing and investment through private capital is to absorb a higher proportion of renewables and promote renewable industry development. This paper first reviews the current overall situation of renewables financing and investment, and further analyzes the policy environment with respect to the development plan, regulation and special funds. Based on the analysis of the status quo, the paper then discusses the internalities and the externalities that have driven the changes of private capital investment in renewable energy projects, illustrated by a strengths weaknesses pportunities threats (SWOT) analysis. An ideal financing model, public–private partnership and distributed energy resources pattern are analyzed to identify key arrangements and design proper development schemes for both private investors and the government. If China can overcome the defects and obstacles in a reasonable and orderly fashion, the financing and investment problem of China’s renewables industry will be solved in many ways. Private capital in the Chinese renewable energy market will bring great incentive if the entire industry can select some promising sub-industries in the renewables sector and choose some appropriate operation modes.