M&A activity in the renewable energy sector has grown globally, but with notable differences between the U.S. and Europe. According to Enerdatics’ 2024 report, market dynamics in both regions are shaped by distinct regulatory, economic, and technological factors.

The U.S. has strengthened its attractiveness for renewable M&A investors, whereas Europe shows signs of slowdown.

Tax Incentives and Public Policies: The U.S. Advantage

One of the key drivers of market growth in the U.S. has been the Inflation Reduction Act (IRA), which has allocated more than $370 billion to the energy transition. “The IRA has completely reshaped the renewable energy landscape in the U.S., providing long-term incentives that make acquisitions more profitable,” states the Enerdatics report.

On the other hand, Europe’s regulatory environment is more fragmented, facing uncertainties regarding EU energy market reforms. While the Green Deal and the REPowerEU program aim to strengthen energy independence and accelerate the transition, their impact on M&A has been more moderate.

“Compared to the U.S., Europe’s investment ecosystem has been more cautious, with stricter regulatory restrictions and fewer direct tax incentives,” the report highlights.

M&A Market: The U.S. Outpaces Europe in Key Transactions

During the first quarter of 2024, the total value of M&A transactions in the U.S. surpassed Europe’s by 30%, driven by mega-mergers in the solar and wind sectors.

🔹 Key Transactions in the U.S.:

• Acquisition of a 2 GW solar portfolio by a private investment fund.
• Purchase of a key energy storage company in Texas.

🔹 Key Transactions in Europe:

• Sale of North Sea wind assets by a German utility.
• Investment by a pension fund in a green hydrogen company in Spain.

In Europe, total M&A activity reached $40 billion, with private equity-backed deals totaling $22 billion. The United Kingdom and Germany remained dominant, while Romania and Greece gained traction, driven by competitive energy prices and favorable regulatory policies.

Differences in Access to Financing

Access to capital is another key differentiating factor between both regions.

🔹 In the U.S., investment funds and large utilities have been more aggressive in acquiring renewable assets, taking advantage of more favorable financing rates.

🔹 In Europe, macroeconomic uncertainty has limited credit availability. Higher interest rates in the Eurozone have increased project financing costs, reducing appetite for large-scale acquisitions.

Outlook: Can Europe Regain Competitiveness in Renewable M&A?

Despite the slowdown in some European markets, the continent remains a leader in innovation and climate policies. Advances in technologies like green hydrogen and offshore wind could revive investor interest.

“Europe remains a key market for renewables, but it needs regulatory and financial adjustments to facilitate industry consolidation,” Enerdatics emphasizes.

While the U.S. continues to lead renewable energy M&A in 2024, Europe will need to adapt its strategies to remain competitive in an increasingly dynamic market.

Future Trends: Private Equity and Energy Storage to Drive Growth

Enerdatics forecasts that private equity will continue to dominate renewable energy M&A in 2025, leveraging lower interest rates to acquire premium assets.

Additionally, the battery energy storage sector (BESS) is expected to experience significant growth, particularly in Australia, Chile, and Europe, as grid constraints and renewable energy intermittency drive demand for flexible energy solutions.

Furthermore, Romania and Greece are emerging as key investment destinations, supported by renewable energy-friendly policies and a growing power purchase agreement (PPA) market.