On September 18, the Energize NEXT Climate Software Summit convened 200 climate leaders across the startup, investor and corporate and communities in Chicago for a day of thought-provoking discussions and meaningful connections. Though recent headlines have reflected apprehension about the pace of the energy transition, the event served as a reminder that those doubts pale in the context of the immense progress already made and the vast potential still ahead within the space. With more than $300 billion invested in climate tech in the past decade and projections that the next decade will see over $1 trillion more, the event was a testament to the economic—and technological—potential of the next stage of climate solutions.
The event kicked off with a look back at “Clean Tech 1.0,” the period from 2003 to 2013 that represented the first significant wave of climate investment. This chapter saw a surge from under $1 billion of annual investment to over $4 billion in just under four years—an influx of capital that was pivotal in kickstarting the industries that now serve as the backbone of the energy transition. A few climate tech pioneers saw big wins, unlocking a unit economic breakthrough and building out markets that never existed, but with these successes came growing pains and plenty of headline failures. Many companies were ahead of their time, trying to deploy cutting-edge technology in a market and regulatory environment that wasn’t yet ready to support it. As a result, these businesses often struggled with profitability, and many did not survive.
But today is a different story. Despite the market’s current headwinds, annual investment into what we now call “Climate Tech” is more than five times the 2011 peak of Clean Tech 1.0. And not only is the market bigger, but it is also more diverse: where the Clean Tech 1.0 decade saw $25 billion invested across just 15 technologies, the past ten years have brought in $300 billion spread over 75 technologies. The economics have also changed; with the scalability of renewable technology driving down production costs, a broader landscape of capital providers, and regulatory tailwinds, the energy transition is not simply a feel-good opportunity: it is also the best solution for our wallets. And underpinning it all is a digital infrastructure, enabling faster innovation, better tools, and more resilient business models through climate software.
Across eight sessions, the speakers at NEXT dove into the topics shaping the climate landscape today, ranging from the 2024 U.S. election to battery technology to achieving profitability. Here are the prevailing themes from the day’s discussions:
1. The energy transition is here to stay. The shift to renewable energy (solar, wind, batteries) is inevitable and makes economic sense.
“I think why talent from Google, Meta, Amazon, and other large tech companies want to get into the energy transition is because if you look over a 10-year horizon, there’s no question a shift toward renewables is happening; largely because it makes economic sense, not purely policy reasons. And the things that are going to get built out and optimized over that timeframe are entirely different and significantly larger than the things we see today.” - Matt Idema, President & COO, Aurora Solar
2. It's unlikely the U.S. election will significantly derail the growing momentum of clean energy. Energy demand is only increasing and most are optimistic that the Inflation Reduction Act will continue to drive the clean energy future, even if some adjustments occur.
“While the outcomes of the U.S. election may affect the pace of renewable energy buildout, the energy transition itself is inevitable. Clean energy companies like Invenergy are seeing significant increases in energy demand and will not slow the pace of the infrastructure buildout that the country needs." - Michael Polsky, Invenergy Founder & CEO
3. However, there are still challenges to address, which will be accelerated by AI’s energy consumption – particularly in infrastructure and supply chains. As generative AI expands, energy is becoming a bottleneck, with infrastructure challenges creating delays. One of the biggest issues in the energy system is transmission, mainly brought on by the increase in grid interconnection queues.
"In the near-term, even though some of these use cases for AI will overpromise and underdeliver in enterprise in particular, the demand for energy load growth is real. The question is: Can we go build the infrastructure and try to scale it?" - Hannes Boehning, Founder & CEO, Blumen Systems
4. But, there's a path forward when it comes to solving these challenges, and software will be one of the key enablers. From managing solar efficiently, to tackling transmission and battery deployment and optimization, software will be a key enabler for the energy transition.
"The fact that conferences are now happening purely on climate software indicates that the energy transition can no longer be managed solely in PDFs and spreadsheets. Now, companies are increasingly leveraging technology to manage data to invest with lower risk, faster velocity, and more liquidity.” - Amanda Li, COO & Co-Founder, Banyan Infrastructure
5. For founders, it’s all about team. The team is an entrepreneur’s most important asset, and for teams within energy there is not only great technical talent but also incredibly passionate founders that bring teams together to push for a common mission.
"A pleasant finding is that without fail, there's a lot of mission-driven philosophy in the operators, the investors, in the entire ecosystem of the energy transition. It manifests itself in high NPS scores, and high employee satisfaction. But it's actually just nice to be able to sit down with management teams that actually believe in the mission.” - Alex Lue, Managing Director, Blackstone
The Energize NEXT Climate Software Summit highlighted that, despite current market uncertainties, the climate software industry is more dynamic and resilient than ever. The transition to clean energy is inevitable, and software will be the key enabler of this shift, driving innovation and solving critical challenges. With a strong, mission-driven workforce and collaboration across sectors, the optimism and momentum from this year’s NEXT summit make it clear that the future of climate solutions is bright.
