Over the last six months, the U.S. energy market has shifted considerably as it responds to a combination of the long-term industry trends of increased load growth and sustainability and the current reprioritizations under the Trump administration of “energy dominance”. In particular, the massive growth of U.S. data centers and their exploding energy demand, along witha renewed appetite for oil and natural gas development, is influencing investment activity.
As savvy investors follow the opportunities emerging from surging power demand, specific renewables opportunities remain an attractive option for private equity transactions. Recent interviews with leading market participants highlighted that, just as the wider energy landscape is revisingits focus, so too is the clean power sector, where solar and storage are the near-term winners.
Solar and storage thriving on scalability
With a record 33GW of utility-scale solar capacity commissioned lastyear, solar continues to be a sector around which investors want to consolidate. Deployments of solar once again dominated U.S. grid additionsin Q1 of 2025, accounting for 69 percent of allnew electricity-generating capacity, according to the Solar Energy Industries Association.
Meanwhile, American Clean Power reported that energy storage entered its first year of “double-digit deployment” (in GW) in 2024,as it becomes a recurring feature of new development-stage solar farms. Its sustained growth in Q1 of 2025 — with 2GW added to the market — is indicative of the momentum that storage, like solar, has gathered in recent years.
Private equity groups are drawn to the investment opportunities arising from solar and storage’s potential for scalability. The new-build environment for these projects is favorable, with generally simpler permitting processesand smaller footprints to manage. In addition, the pace of installation makes solar and storage desirable assets as the U.S. energy industry looks to manage exploding load growth and reliability demands.
A persistent challenge for the solar sector has been the disrupted supply chain, but private equity investors are identifying a long-term upside to stepping in to support developers who are dealing with short-term capital gaps.
Domestic solar manufacturing is another area that some market participants have earmarked for effective investment as the U.S. added 8.6GW of solar module manufacturing capacity in Q1. Given the current administration’s focus on increasing tariffs, the need for U.S.-manufactured components is acute.The advantage of investing capital in domestic manufacturing, from the investors’ perspective, is that it is not exposed to this same international trade risk.
Overall, solar and storage are still capturing investors’attention and confidence as their scalability outcompetes rival technologies.
Apparent cooling of Investor interest in wind
By contrast, 2024 was the worst year for wind installations in the U.S. for a decade, with just 5GW of capacity being approved. Though a decent short-term pipeline remains in place for the wind sector, the pausing and shelving of projects due tothe current administration’s stance on wind underline and emphasize the level of uncertainty in the market.
While regulatory, permitting, and timeline hurdles can pose challenges for some projects, investors have also pointed to the large footprint required for wind projects as a hurdle when faced against the scalability of solar and that, unlike solar and storage, many of the most promising locations in terms of resources for wind are already occupied.
Opportunities in transmission infrastructure
With electricity demand projected to double by 2028 in the U.S., and with solar, storage, and wind having rapidly expanded over the years to supply a major portion of this demand, grid efficiency and reliability are increasingly critical.
In light of increased energy demand, it is well documented that an aging grid infrastructure is acting as a constraint on effective power production. As a result, certain participants are viewing transmission infrastructure (power utilities, distribution assets, pipelines, and other types of core infrastructure) as an appealing prospect growing out of the renewables space.
While some investors view legislative action as a requirement to meaningfully stimulate investment in grid infrastructure, others are banking on anticipated legislative reform and are making progress in their transmission investments.
Interest in renewable investment remains strong
Overall, investment strategy in U.S. energy is still underpinned by the pace and scale of the transition to renewables — notwithstanding the recent opportunistic pivot to oil and natural gas. We are seeing the changing priorities of the wider energy landscape being mirrored to some extent within the clean power space as investors double down on solar and storage.
For investors, grid reliability and the certainty of rising energy demands have become the driving force of the U.S. energy market with long-term trendsand the aims of Trump’s administration forming some ofthe primary considerations behind current and future strategic spending.
By Christine Byrnes, Partner, Troutman Pepper Locke