Apr 13, 2021 - Energy & Environment

Private equity's renewable investments hit a record in 2020

Data: PitchBook; Chart: Axios Visuals

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.
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