Renewable energy investment hits $686 billion in 2025, Grant Thornton UK and Clean Energy Pipeline report
Global renewable energy investment reached $685.9 billion in project financing in 2025. But the real story, according to a new report from Grant Thornton UK and Clean Energy Pipeline, is how investors are pricing the risk that comes with it.
The 2025/26 Renewable Energy Cost of Capital and Valuation report draws on a global survey of leading investors, lenders and developers alongside Clean Energy Pipeline's transaction database. This provided a benchmark of discount rate expectations and valuation approaches across secondary-market wind, solar and battery energy storage system (BESS) transactions.
Global renewable energy M&A deal value rose 35% to $217.7 billion in 2025, with solar PV and onshore wind accounting for $117.4 billion – more than half of total deal value for the first time. Yet the market is navigating a more complex risk environment, and valuation practice is adapting accordingly.
The approach to pricing merchant risk can vary significantly between projects. Fully merchant projects face discount rate uplifts of 100-300 basis points over contracted equivalents, reflecting differing views on price volatility, revenue certainty and downside protection.
How investors think about what a renewable asset is worth at the end of its original life is also changing. Repowering, rebuilding or upgrading a site to extend its productive life, is now cited by 36% of respondents as a legitimate source of residual value.
For assets still in development, investors are cautious about recognising value until a project is close to shovel-ready, with 71% waiting until late-stage development or beyond, when planning and grid approvals are largely settled. For sites that pair solar or wind with battery storage, there's a further complication: most investors still value the two components separately, even though the revenue each generates is increasingly dependent on how they operate together.
Jade Palmer, Valuations and Modelling Partner at Grant Thornton UK, commented:
"What the survey tells us, and what we see in practice, is that renewable energy valuation has become a genuinely bespoke discipline. Investors are now working harder to align their assumptions with the specific risk profile of each project: its revenue structure, development stage, technology configuration and merchant exposure. The signal from this year's data is clear: valuation robustness comes from the quality of judgement applied, not the complexity of the model."
Chenwu Qian, Head of Data at Clean Energy Pipeline, added:
"The transaction data we're seeing supports this picture. Deal activity in 2025 was strong, particularly in solar and onshore wind, but pricing discipline has tightened. The buyers achieving the best outcomes are those with the sharpest view of risk at the asset level, and that's exactly what this survey helps the market to benchmark."
The report covers countries ranked among the top 20 global markets for renewable energy investment over the 2024-2026 period, spanning Europe, Asia, Africa and the Americas.