Private equity's renewable investments hit a record in 2020
- Ben Geman, author of Axios Generate
Private equity investments in U.S. renewables hit a record $23.7 billion last year, per a new report on deals from American Investment Council, which is the industry's lobbying and advocacy arm.
Where it stands: "PE invests in renewable energy in two major ways: buying and expanding established power generators and increasing their production over the long term, and financing development costs for new renewable power companies," it states.
- The report says several things are driving the increase, including renewables' cost competitiveness and investors in PE firms steering more capital into ESG.
By the numbers: The report, using PitchBook data, also notes that private equity firms invested over $11 billion last year in other clean tech applications, like energy conservation and water purification.
The big picture: AIC said the report is part of a regular series examining growing areas of investment.
- But it comes amid increased interest in the financial sector's role in accelerating low-carbon energy deployment — and criticism of its fossil investments.
- As we noted last week, activists have recently been increasing pressure on private equity heavyweights to decarbonize their portfolios.