The U.S. clean energy sector is expanding rapidly, driven by innovation, ambitious local clean energy goals, and rising corporate and consumer demand. From utility-scale solar and wind to energy storage, hydrogen, and carbon removal, the market is evolving across multiple fronts.
Emerging trends – such as AI-powered grid management, building and transport electrification, and virtual power plants – are transforming how energy is produced and consumed. Despite permitting challenges and political uncertainty, long-term prospects remain strong, presenting major opportunities for businesses and investors.
Market Size & VC Landscape
Market Size
The U.S. renewable energy market is projected to grow from $1.26 trillion in 2024 to $4.61 trillion by 2035 (CAGR: 12.48%). In installed capacity, it is expected to grow from 480 GW in 2025 to 790 GW by 2030, reflecting a CAGR of 10.48%. Annual investments exceeded $200 billion in 2024 and are projected to top $300 billion by 2030. Solar alone could reach 500+ GW of new capacity by 2035.
California’s clean energy and climate tech market is experiencing unprecedented growth, driven by record-setting investments, ambitious policy targets, and a vibrant innovation ecosystem centered in Silicon Valley. In 2024 alone, California added approximately 7,000 megawatts of new clean energy capacity – the largest single-year increase in state history – bringing the total to over 25,000 megawatts added in just five years.
VC Investment Landscape
Venture capital plays a critical role in scaling climate tech. U.S. energy transition investment rose to $338 billion in 2024.
The rapid expansion of clean energy has been underpinned by strong venture capital activity; U.S. clean energy and power companies attracted $7.6 billion in VC investments in 2024, a 15% year-over-year increase, with early-stage deals remaining particularly resilient and signaling a robust pipeline for future innovation.
Silicon Valley remains at the forefront of climate tech, home to roughly one-fifth of all U.S. climate tech startups, with strengths in solar, battery storage, electric vehicles, smart grid technology, and carbon capture.
Key Innovations out of Silicon Valley
Beyond solar, wind, and hydrogen, promising areas include:
- Agrivoltaics and solar co-location
- Battery technologies, advanced battery systems that support grid reliability
- Carbon capture, utilization, and storage (CCUS) and the embedding of captured carbon into building materials
- Geoengineering and smart grid platforms, decentralized infrastructure and virtual power plants
- EV charging infrastructure
- environmental monitoring technologies using AI, IoT, and satellite imagery to provide real-time insights into air and water quality, wildlife tracking, and ecosystem health
Outlook: The Path to a climate-neutral future
The U.S. clean energy market is experiencing rapid growth, driven by corporate demand, technological innovation, and ambitious local clean energy goals – California, for example, commits to achieving 100% clean energy by 2045.
California’s clean energy transformation is further evidenced by the grid’s performance: in 2024, the state achieved 100% clean electricity for periods on 219 days, with solar and battery output reaching new peaks and no Flex Alerts issued despite extreme heat events. As the state targets over 75,000 megawatts of new clean energy capacity by 2040, Silicon Valley’s leadership in climate tech innovation and investment is poised to play a pivotal role in meeting California’s ambitious climate and economic goals.