It’s in the sun, the wind, the sea – energy from renewable sources is all around us. So how hard can collecting it be? As it turns out, very – and with huge investments in both time and resources.
Renewable Energy: A Brief Overview
It took nearly three decades for the technology to go from a pipe dream to what is now considered the future of energy. Bolstered by public support for green power, governmental incentives to curb the effects of climate change, and developments in technology, renewable energy is now often cheaper than fossil fuels and is expected to account for nearly half of the world’s electricity output by 2030.
But while renewable energy has become a big business ruled by a flock of hefty companies, some obstacles remain; integration into the grid is difficult given the intermittent nature of the energy’s sources, for example, and several promising technologies like geothermal and tidal power remain comparatively underdeveloped. These problems are often tackled by startups, who can move and innovate faster than older, more sluggish companies. For that, they need cash – but luckily for them, there’s a sizeable group of renewable energy investors all too happy to hand it to them.
Read also: Top 5 Climate Tech VCs & Investors in 2024
Leading Renewable Energy Investors
Energy Impact Partners
- Location: US
- Founded: 2015
- Investments (USD): at least $2.5 billion (over three funds)
- LinkedIn: https://www.linkedin.com/company/energy-impact-partners
Overview: You may have guessed it from their name, but Energy Impact Partners is completely focused on, well, energy. Through its $4 billion in assets under management, it claims to have prevented the release of 19.4 million tons of CO2. Highlights from its portfolio include Arcadia, the most prolific community solar provider in the US (which also provides carbon accounting software), Singularity (focused on grid decarbonization), Zap (fusion), and several battery storage companies.
Shell Ventures
- Location: UK/Netherlands
- Founded: 1996
- Investments (USD): unclear; up to $3.9 billion based on total investments and average round size
- LinkedIn: –
Overview: It might seem odd that fossil fuels companies’ investment arms find themselves on this list, but it’s a well-thought-out strategy; investing in green startups helps them boost their public image and throw a bone to renewables at a much cheaper price than giving up their main businesses. Shell’s strategy is leading funding rounds for its companies while remaining a ‘minority investor’; it states it’ll invest a total of $22 million into a company over its lifetime. Like many other climate-focused investors, Shell isn’t hyperfocused on renewables; still, it’s invested in 29 such companies, including residential solar provider Palmetto, fusion company Zap, and energy storage systems developers Kraftblock and Corvus.
Breakthrough Energy Ventures
- Location: US
- Founded: 2015
- Investments (USD): $3.5 billion in ‘committed capital’
- LinkedIn: https://www.linkedin.com/company/breakthrough-energy
Overview: Any renewable energy investor list would be remiss without Breakthrough Energy Ventures, the Bill Gates backed firm whose mission revolves around reaching net-zero by 2050. A big part of that is renewable energy, so its 110 payees include Fervo Energy (geothermal), CubicPV (tandem solar modules), and a handful of fusion companies (Commonwealth, Type One, and Zap).
Prelude Ventures
- Location: US
- Founded: 2012
- Investments (USD): $2 billion assets under management
- LinkedIn: https://www.linkedin.com/company/prelude-ventures
Overview: With a focus on early-stage startups, Prelude claims to ‘operate where many venture firms can’t or won’t.’ It’s built up a diverse portfolio made up of carbon management, sustainable agriculture, and mobility companies (among others), but it’s got a healthy group of renewable energy companies under its wing too. These include integration specialists (Branch Energy, LevelTen Energy), fusion developers (Xcimer, Thea), and geothermal startups (Fervo, Quaise).
Lowercarbon Capital
- Location: US
- Founded: 2018
- Investments (USD): at least $1.5 billion (via several funds)
- Linkedin: https://www.linkedin.com/company/lowercarbon-capital
Overview: Lowercarbon Capital’s mission is simple enough: ‘unf**k the planet.’ It’s now closer than ever to this goal since raising $550 million for two funds earlier this year, putting its assets under management at over $2 billion. Its hefty portfolio is laden with climate companies from every walk of life, including a sizeable group of energy-focused ones; they include Airloom (wind power produced from what looks like a clothesline), Arbor (highly efficient biomass power that captures the CO2 it produces), and Zanskar (identifying the best sites for geothermal power in the US).
Chevron Technology Ventures
- Location: US
- Founded: 1999
- Investments (USD): ~$900 million (through its Future Energy Funds)
- LinkedIn: –
Overview: Though oil giant Chevron’s venture arm has been investing in climate tech since its inception, it inaugurated the first of its Future Energy Funds in 2018; it has since launched another two, focusing on decarbonization ‘energy decentralization.’ The company also plans to spend $8 billion on low-carbon businesses between 2021 on 2028; it has so far invested in over 30 companies, including Ocergy (floating offshore wind specialists), RayGen (solar electricity and storage), a handful of energy storage companies, and the ever-present Zap (fusion).
Clean Energy Ventures
- Location: US
- Founded: 2017
- Investments (USD): $415 million (via two funds)
- LinkedIn: https://www.linkedin.com/company/clean-energy-ventures
Overview: You won’t find a renewable energy investor more dedicated to the energy transition than Clean Energy Ventures. The firm only invests in startups who have the potential to mitigate 2.5 gigatons of CO2 by 2050; it’s got a knack for spotting these early and is often a startup’s first investor. It shouldn’t be surprising, then, that Clean Energy Ventures’ portfolio consists of younger, more niche companies than some of its peers; these include Electrified Thermal (electric fire bricks for industrial heat), Volexion (graphene-coated cathodes in lithium-ion batteries, improving performance and safety), and SunDensity (coating for solar panels that can increase efficiency by up to 20%).
SET Ventures
- Location: Netherlands
- Founded: 2007
- Investments (USD): $300 million+ in fund sizes
- LinkedIn: https://www.linkedin.com/company/setventures
Overview: Describing itself as ‘Europe’s leading energy VC,’ SET has dozens of companies under its wing. Through these, it claims to have avoided the release of 3.3 million tons of CO2 in 2023 alone. This renewable energy investor takes a systematic approach, focusing on companies that fall under one of the six technology types SET believes will enable a carbon-free future; its investments include Green Eagle Solutions (AI for running renewable energy assets autonomously, increasing efficiency), Tibo Energy (software-based grid optimization), and General Fusion.
Aster Capital
- Location: France
- Founded: 2000
- Investments (USD): ~$542 assets under management
- LinkedIn: https://www.linkedin.com/company/aster-capital
Overview: Aster is one of the smaller, more specialized firms on this list; it’s a renewable energy investment firm focused solely on ‘hard-to-abate’ industries, and a good chunk of its portfolio of 56 companies are in the renewables business. Unlike many other funds, though, several of Aster’s investments are based in Africa, where around 43% of the population lacks access to electricity. These companies include SunCulture (solar-powered water pumps and irrigation systems for farming households), Inspirafarms (solar-powered refrigeration and food processing), and several others furthering access to solar energy on the continent.
Key Areas of Investment in Renewable Energy
You can’t reinvent the wheel – or the solar panel. That’s why most renewable energy investors are more interested in startups developing new technologies, or solving some of the problems still faced by old ones. Looking at the above investors’ portfolios, this is obvious; energy storage, key to integrating renewables into the grid, is popular with these firms, as are nascent technologies like fusion (which technically isn’t even a renewable energy source, though it is clean).
There are a few reasons for this. For your garden-variety investment firms, such innovations stand a good chance of making a buck or getting acquired since they’re addressing novel niches in the industry. But for the investment arms of bigger companies, primarily the fossil fuel giants, climate tech investment can be much more valuable than that. Investments in renewable energy boost public perception of the company and diversify their businesses, but by investing in companies whose technologies are either non-threatening to their core businesses or are still decades away – like green hydrogen or fusion – they can keep up these appearances without impacting the company’s future.
