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2024 Renewable Energy Investment Outlook for Start-ups

In the first half of 2023, there was a remarkable surge in global investments in renewable energy, especially solar, reaching a total of $358 billion. Of this, $335 billion was allocated to project deployment through both asset finance and small-scale solar, marking a 14% increase compared to  2022. This is a consistent acceleration in energy transition investment as renewable energy continues to scale.

Renewable energy companies also experienced success in securing equity to bolster their growth and expansion. Commitments from venture capital and private equity towards renewable energy companies reached $10.4 billion in the first half of 2023, representing a 25% increase compared to the preceding year. Additionally, the new equity raised in public markets during the same period amounted to $12.7 billion, marking a 25% surge from the first half of 2022.

By the end of 2023, the US Energy Information Administration anticipates a substantial growth in utility-scale solar installations, more than doubling the figures from 2022 to a record-breaking 24 GW. Concurrently, wind capacity is expected to increase by 8 GW.

What to expect in 2024

As we transition into 2024, federal investments in clean energy and decarbonization could empower renewables to overcome challenges posed by the seismic shifts necessary to meet the country's climate targets. The interplay of advancements and obstacles shaping the upcoming year sets the stage for a variable-speed ascent across renewable technologies, industries, and markets.

This year, the renewable energy sector is poised for significant advancements as historic climate legislation gains traction. This progress is expected to manifest through the finalization of tax credit guidance, an uptick in the issuance of Loans Program Office loans, and the release of additional IRA grant funding (only 10% of which has been disbursed thus far).

The infusion of substantial public and private investments, along with the capital directed towards clean energy transition, is anticipated to drive significant growth across various segments. This includes the continued rise of solar and storage deployments, a resurgence in onshore wind projects, and an accelerated adoption of residential technologies. Moreover, offshore wind and green hydrogen industries may carve out a robust presence, while underdeveloped renewable sources are anticipated to play a more prominent role in clean energy portfolios.

Concurrently, clean energy manufacturing revival could create resilient renewable supply chains nationwide, emphasizing the importance of an expanded grid, skilled workforce, and streamlined development processes in 2024 to meet climate goals.

Important developments to watch for include guidance from the US Treasury on hydrogen and domestic content, the impact of IRA and IIJA funds on workforce development, and actions by the Federal Energy Regulatory Commission and the Department of Energy in electric grid reform. With El Niño conditions, more severe weather will highlight the need for renewable resources to strengthen the grid. The growing use of generative AI in renewable operations and workforce planning may also enhance resilience and further speed development and investment. 

- January 29, 2024


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