As 2024 draws to a close, we're reflecting on a year of remarkable progress in the climate sector: solar generation is up 26% , battery installations are increasing by 30%, and clean energy is now powering nearly a quarter of U.S. energy consumption. At Energize, we've seen this momentum firsthand, growing our AUM to $1.6 billion and welcoming innovative companies like Elum Energy and Grid Status to our portfolio in 2024. Now, as we look ahead to 2025, we see a landscape where practical innovation meets unprecedented opportunity. The partners at Energize identified six key trends that we believe will shape the climate landscape in 2025, reflecting a maturing market where consumer demand, technological advancement, and economic forces are aligning to drive the clean energy transition.
Across geographies, industries, and stakeholders, grid transformation will be a top priority. Transmission and interconnection will be in the spotlight, with data, digital tools, and grid technology all stepping in to drive efficiency. While emerging technologies—hydrogen and SMRs among them—remain long-term hopes, 2025 will reward tools that maximize existing infrastructure.
“Transmission and interconnection—these two issues need to be solved to unlock renewable development, and new policies and regulations can be the key." – Katie McClain, Partner & COO
“Forecasts of grid investments from utilities, developers and infrastructure groups are all showing strong growth. The bipartisan nature of energy infrastructure makes the grid a safe haven for investors.”– John Tough, Managing Partner
"I think grid technologies—data, software, grid optimizing sensors and equipment—are poised for exponential growth as all these new entrants to the power markets realize their 'first principles' solutions like SMRs won’t be ready to provide power generation any time soon." – Tyler Lancaster, Partner, Co-Head of Ventures
“We’re due for a wave of consolidation in the grid software space. Between strong balance sheets and demand for grid specific data, we’ll see a few large transactions from incumbents and legacy companies looking to write their next chapter.” – Kevin Stevens, Partner, Head of Growth
With large budgets and a huge need for clean power to run data centers, tech companies will be searching for reliable, resilient sources, and innovation will be rewarded. We’ll also see a new policy landscape, with tech companies leaning in across power market and utility regulatory proceedings.
“It will be very interesting to watch as the big tech players continue to take their energy needs into their own hands. How will the regulators treat this? . . . We haven’t seen companies with this much money on their balance sheets and this desperate for clean power before.” – Katie McClain
“With the AI rush, the tech and energy worlds will converge as they scramble for reliable, resilient sources of power (and power management tools) to fuel data center demand. This is unleashing a wave of energy innovation that will see more near-term dollars put to work despite change at the federal level.” – Juan Muldoon, Partner, Co-Head of Ventures
Dropping Lithium-ion battery prices and the immense economic opportunity of solar + storage calibration make batteries an essential tool in the race to meet gid demand. As key markets saturate with deployments, winners will be advanced players—ones with smart technology and strategic locations that can secure high-value offtake agreements.
“The economic value proposition of solar + storage is unassailable to both consumers and voracious sources of power demand like data centers.” - Tyler Lancaster
“The combination of dropping battery prices and eroding margins will lead to a new world of revenue stream development within the BESS industry—including more innovative approaches to grid servicing, energy shifting, and portfolio multi-asset optimization.” - John Tough
AI will continue to wield major influence in powerdemand, power markets, and power infrastructure. On the application side, westill see a long runway before reaching autonomous grids; instead, we’re payingattention to platforms that activate deep, industry-specific data, operationalcontext, and human insight to efficiently manage infrastructure.
“With a new administration and advances in “hard tech” and AI compounding, venture investors will make a major push into industrial automation technology to power a new renaissance of tech-enabled ‘American Manufacturing’” – Juan Muldoon
“The power grid is a complex system that already relies upon a significant amount of automation. Like other critical infrastructure sectors, I believe AI and technology will play an important role in driving efficiency but ultimately in assisting humans in the loop to more efficiently manage that infrastructure.” – Tyler Lancaster
Funds will deploy their stockpiled dry powder, and IPO and M&A markets will thaw, with companies using acquisitions as a tactic to grow and saturated sectors beginning to see consolidation. 2025 will be a year of exits, and liquidity will spur a flywheel of deals.
“With lower interest rates, a business-friendly political environment, and lower fears of anti-trust, the IPO market will reopen in force and reward private companies that have reached scale and profitability.” – Juan Muldoon
“After a quiet 2024, strategics will get off the sidelines in a big way in 2025. Driven by healthier profiles, M&A activity will emerge as a key strategy for mid-market companies looking to scale.” – Kevin Stevens
2025 will be a year of practical progress, infrastructure investment, and strategic action. We expect energy generation to continue to race to catch up with demand, with software solutions from across the climate landscape emerging to improve technology, drive efficiency, and ensure resilience. As market activity thaws, investors will turn to proven solutions that can meet today’s demands, while consumer sentiment and economic fundamentals—rather than policy—will determine the next wave of successful technologies. As we continue our mission of investing in climate solutions with ambition, one thing is clear: 2025 isn’t about waiting for perfect solutions—it’s about leveraging the tools we have today to build the energy system of tomorrow.
