Clean energy deals are down, but interest remains high
Business

Clean energy deals are down, but interest remains high

The power and utilities industry closed significantly fewer clean energy deals this year, but steady load growth and state decarbonization initiatives will drive more activity in the sector for years to come, according to a new report.

PwC’s Power and utilities: US Deals 2025 outlook notes that only 13 renewable energy deals were done between November 2023 and November 2024, a significant decline from the 27 a year prior.

PwC attributes the drop in volume to uncertainty surrounding November’s Presidential election. A second Trump tenure in the White House will most likely come with an uptick in fossil fuel investment and the loss of some environmental protections, but the authors of the report expect renewables to remain a focal point for organic capital investment and do not anticipate wholesale changes to federal support of the sector.

The bipartisan Inflation Reduction Act has stimulated billions of dollars in domestic manufacturing investments over the last two years, the majority flowing to Republican-leaning states.

PwC notes an increase in fossil fuel generation activity over the past 12 months, which accounted for 19% of total deal value in that span, nearly triple 2023’s level of 7%. Deals within the subsector were driven by an assumed continued need for natural gas infrastructure to ensure reliability via peaker plants- although the first solar-plus-storage peaker plant just came online in California.

In the last 12 months, PwC tracked 30 total deals (valued at a combined $27.8 billion) in the power and utilities sector, down from 52 in 2023 ($43.3 billion). Vistra’s $6.3 billion acquisition of Energy Harbor in March accounted for 22.7% of the year’s deal volume.

Value propositions in the short-term in the sector remain strong, PwC ultimately concludes, suggesting many strategic, financial, and inbound investors are actively interested in deploying capital. While the renewable energy sector could face short-term uncertainty surrounding future federal incentives like clean infrastructure funding from the Department of Energy’s Loan Program Office, many industry experts expect a more strategic review of IRA provisions as opposed to a wholesale reversal. Strategic due diligence will be crucial as dealmakers navigate a shifting regulatory landscape and potential market volatility, the report adds, making it important to stay agile and informed about policy developments as the new Trump Administration begins to take shape.

Deals are still getting done

Despite the decline in deals for renewable energy projects, some big ones have still been pushed across the finish line post-election, including financing of a few community solar portfolios.

Convergent Energy and Power just closed a programmatic construction-to-term loan, tax equity bridge loan, and letter of credit facility with Mitsubishi UFJ Financial Group that will accelerate the construction of a portfolio of distributed solar and energy storage projects. The developer expects $150 million in initial funding.

Last week, Dimension Energy closed on a major financing package supporting the development of 30 community solar projects across seven states. Dimension secured a $284 million construction and tax equity bridge loan led by First Citizens and closed on a structured equity investment from HA Sustainable Infrastructure Capital, Inc. (HASI) in a new project joint venture. 

The Dimension deal closely mirrors one recently announced by fellow community solar developer Pivot Energy, also led by First Citizens Bank and including a joint venture with HASI. First Citizens will supply Pivot with a $450 million debt warehouse that supplies the flexibility needed to continually pump out new projects.