New AIC & PitchBook Report: Private Equity Investment in Clean Technology Rose to Over $27 Billion in 2021, Hitting Record High
WASHINGTON, D.C. — In celebration of Earth Day, the American Investment Council and PitchBook released a new report today highlighting how the private equity industry is expanding its clean technology footprint. Private equity investment in clean technology surged to over $27 billion in 2021, up from roughly $20 billion in 2020. Private equity firms have invested almost $150 billion and sponsored more than 1,000 U.S. clean technology companies over the past decade.
Investments in clean technology include a range of renewable energy solutions – such as solar, wind, and hydroelectric – as well as areas like electric vehicles, waste management, food production and supply chain sustainability, and recycling solutions.
“Private equity is at the forefront of innovation in clean technology and is powering the economy and jobs of the future,” said Drew Maloney, President and CEO of the American Investment Council. “Private equity firms are taking risks on promising projects that are revolutionizing the future of renewable energy, reducing carbon emissions, and making our world cleaner. We’re proud that the industry is financing clean tech companies on both coasts and in every state in between, and we expect investments in this area to continue to grow.”
Key findings from AIC’s new report, “Investing in a Cleaner World: Private equity and sustainability,” include:
- Renewable Energy: Private equity has invested over $100 billion in renewable energy since 2010 and $21.5 billion in renewables in 2021 alone, including more than $6 billion in solar and wind projects. [Graph, p.3]
- Clean Tech Activity By Region: PitchBook data shows an even distribution of clean technology investments in every region throughout the country. [Graph, p.3]
- Sustainable Food Production: Over the past decade, private equity firms have sponsored 135 agtech companies at the nexus of food production and technology, totaling nearly $5 billion in capital. A key example is private equity’s investment in soil sensors, which have helped farmers save money on water costs and enhance yields. [Graph, p.4]
- Cleaning Up the Planet: Private equity has a long history of investing in environmental services, including areas like waste management, recycling centers, and oilfield cleanup services. Firms invested in 142 deals and a record $17.2 billion in the environmental services sector in 2021. Over the past decade, private equity firms have sponsored 935 environmental service companies, totaling almost $100 billion in capital. [Graph, p.5]
- Impact Fundraising: Over the past decade, US-based impact investors have raised more than 250 funds and a combined $66 billion of available capital. [Graph, p.8].
The new AIC report offers several examples of private equity firms’ recent investments in clean technology, including ArcLight Capital Partners’ investment in Mobility, an electric vehicle company and Goldman Sachs’ investment in Synagro, which provides treatments to transform waste streams into effective fertilizers. The report also spotlights several funds focused on ESG, decarbonization, the energy transition, and more from major firms like KKR and Brookfield to smaller investors nationwide.
The full report with additional data and case studies can be found here.
