Volatility in the US wind and solar sectors is opening new opportunities for private equity investors, according to law firm Troutman Pepper Locke in a wide-ranging report on US energy investment opportunities under the Trump administration.
Private equity investors are sniffing out new opportunities in the fast-moving US energy sector – and renewables developers affected by market volatility could be one target.
That is the analysis of law firm Troutman Pepper Locke in a report called ‘Power Shift: Top Five Private Equity Investment Trends in US Energy’ that came out on Tuesday 10th June. The report featured analysis from private equity investors active across the US energy sector, from renewables and nuclear to oil and gas.
Nick Hertlein, managing director at US investment firm Stonepeak, said developers and operators in the wind and solar sectors have faced disruption in supply chains in recent years. This has raised costs for these firms and increased their need for growth capital.
He explained: “On the back of that volatility, we’ve seen a lot of opportunity to step in and provide growth capital for sponsors who may have exhausted their capital for a particular development or investment.”
Hertlein added that Stonepeak was also “helping to partner with corporates in ways that help them to manage their global programs and their balance sheets”.
Even so, the business environment makes it harder for developers to deliver new wind farms than solar farms, even with the potential impacts of Trump tariffs on the import of technology such as solar panels. Hertlein said that “the best resources [for wind farms] in the US have already been spoken for”, whereas solar can be rolled out more widely.
But this was only one of the five trends identified in the report:
1) Data centre growth requires many power sources: Growth in the data centre industry to provide artificial intelligence (AI) services is fuelling massive growth in electricity demand in the US. Hyperscalers such as Amazon, Google, Meta and Microsoft have historically looked to use wind and solar power for data centres, but they are now looking at conventional sources too to meet demand. Private equity investors see that this growth will lead to opportunities across the sector.
2) Using gas to beat coal internationally: The US has been at the forefront of moves to use natural gas to replace coal generation, as it is considered more environmentally friendly because it produces fewer pollutants and less carbon dioxide when burned. Some private equity groups are now seeing opportunities to extend this globally by investing in US companies that can export natural gas to internationally: “Over the next decade and likely over the next two or three, we see U.S. natural gas playing an increasingly critical role in the global energy mix,” said Jason Downie, co-founder and managing partner at Tailwater Capital.
3) Trump boosts investor interest in the oil industry: Trump’s re-election has reinvigorated the interest of some private investors in backing oil firms. Despite the growth of renewables, investors in the report argued that oil will continue to be a mainstay in the global energy mix, and the challenge for the private equity sector is to back firms that remove infrastructure barriers that impede efficient delivery of oil. For those firms, fixing bottlenecks equates to financial value.
4) Solar and storage soar – but wind struggles: The report highlighted the wildly different fortunes of solar, storage and wind in 2024 installation figures. A record 33GW of utility-scale solar capacity was commissioned in the U.S. in 2024, along with 11GW of energy storage and less than 5GW of wind. Pat Eilers, managing partner at Transition Equity Partners, said the wind sector struggles to match the scalability of solar because there are fewer attractive sites and wind farms need more land. He added Trump tariffs could help domestic solar panel makers too.
5) Nuclear maintenance attracts niche investors: The often-overlooked nuclear sector has gained fresh impetus under the trump administration. For example, on 23rd May, President Trump signed an executive order to expedite and promote the production and operation of nuclear energy. Private equity investors in the report said this was unlikely to lead to a major wave of new-build nuclear power plants, but would increase the pressure on companies to keep existing nuclear plants operational. Firms that provide those maintenance and other supporting services for operational nuclear plants could be attractive investment targets.
The Trump administration is making major changes to the US energy sector and, when private equity investors see changes, that often means new opportunities too.
Jennie Simmons, partner at Troutman Pepper Locke, concluded that “investors who embrace technological advancements in energy efficiency, smart grids and storage will see operational and competitive advantages, which will provide flexibility and adaptability in this dynamic market”. Private equity investors that focus on these strategic considerations and “effectively navigate challenges and capitalise”.
Join us at Financing Energy Transition and our other upcoming events
Strategic communications, insight and events for the global energy transition.