Climate Tech's Trillion-Dollar Year
2025 saw $1.1 trillion invested in clean energy and climate technology worldwide. Here's where the money went and what it means.
For the first time in history, global investment in clean energy and climate technology exceeded one trillion dollars in a single year. According to BloombergNEF, $1.11 trillion flowed into renewables, EVs, batteries, hydrogen, carbon capture, nuclear, and grid infrastructure in 2025.
To put that in perspective: the entire global venture capital industry deployed $345 billion in 2025. Climate tech investment was more than three times that. This isn’t niche. It isn’t a bubble. It’s the largest reallocation of capital in human history.
Where the Money Went
Solar: $382 billion. Solar dominated, as it has for several years. But the composition shifted. Utility-scale installations still led, but distributed solar (rooftop and community) grew 67% year-over-year, driven by falling costs and improving battery storage that makes self-consumption more viable.
Electric vehicles: $294 billion. This includes both vehicle manufacturing and charging infrastructure. China accounted for 58% of global EV investment. The U.S. surged to 21%, up from 14% in 2024, driven by IRA incentives and falling battery costs.
Battery storage: $108 billion. Grid-scale storage crossed a tipping point in 2025. Global installed capacity reached 120 GWh, up from 45 GWh in 2023. The economics are now unambiguous: solar + storage is cheaper than new natural gas plants in 95% of markets worldwide.
Wind: $96 billion. Offshore wind had a difficult year, with several high-profile project cancellations due to cost overruns. Onshore wind remained steady. Floating offshore wind showed promise with demonstration projects in Norway and Portugal.
Hydrogen: $42 billion. Green hydrogen investment tripled year-over-year, driven by massive projects in Australia, Saudi Arabia, and Namibia. The cost of green hydrogen production fell below $3/kg in optimal locations, approaching the $2/kg threshold where it becomes competitive with natural gas for industrial heat.
Nuclear: $38 billion. The nuclear renaissance continued. Small modular reactors (SMRs) attracted the most interest, with NuScale’s VOYGR design beginning construction in Romania and X-energy deploying at Dow Chemical facilities in Texas.
Carbon capture: $18 billion. Direct air capture (DAC) investment surged following the DOE’s Regional Direct Air Capture Hubs program. Climeworks expanded its Iceland facility to 36,000 tons/year capacity. Critics note this is still a rounding error compared to global emissions of 37 billion tons.
The Geography of Climate Capital
The investment landscape is intensely geographic.
China leads everything. $546 billion in clean energy investment — nearly half the global total. China manufactures 80% of the world’s solar panels, 75% of lithium-ion batteries, and 60% of EVs. This dominance is a source of both admiration and geopolitical anxiety.
The United States invested $213 billion, a record driven by the Inflation Reduction Act’s tax credits. The IRA has proven extraordinarily effective at catalyzing private investment, with an estimated 8:1 leverage ratio of private to public capital.
Europe invested $187 billion but is struggling with policy uncertainty and permitting delays. The EU’s Green Deal Industrial Plan aims to compete with the IRA, but implementation has been uneven.
Emerging markets are the fastest-growing segment. India ($67 billion), Brazil ($32 billion), and Vietnam ($21 billion) all set records. Africa remains dramatically under-invested at just $15 billion despite having the continent’s best solar resources.
What Changed
Three factors drove climate investment past the trillion-dollar mark:
Economics. Clean energy is simply cheaper than fossil fuels in most applications. The levelized cost of solar electricity fell below $20/MWh in 2025. Onshore wind hit $25/MWh. Natural gas, by comparison, sits at $45-65/MWh depending on the market. The investment case no longer requires climate concern — it’s pure economics.
Policy. The IRA in the U.S., the European Green Deal, China’s Five-Year Plan, and dozens of national climate strategies have created a stable policy environment that de-risks clean energy investment.
Technology. Battery costs fell below $100/kWh, making EV cost parity with ICE vehicles a reality. Perovskite-silicon tandem solar cells reached 33% efficiency in commercial modules. Electrolyzer costs fell 40% in two years.
The Gaps
Despite the headline number, serious gaps remain.
Grid infrastructure is the binding constraint. In the U.S., the interconnection queue — projects waiting to connect to the grid — contains 2.6 terawatts of capacity. Average wait time: 5 years. You can build all the solar and wind you want; if you can’t connect it to the grid, it’s useless.
Industrial decarbonization — steel, cement, chemicals — remains underfunded relative to its importance. These sectors account for 30% of global emissions but received only 4% of climate investment.
Adaptation is the most neglected category. As climate impacts intensify, investment in resilient infrastructure, flood protection, heat-resistant agriculture, and early warning systems is critically important. It received roughly $30 billion in 2025 — a fraction of what’s needed.
The Trajectory
BloombergNEF projects climate tech investment will reach $1.5 trillion by 2028 and $2 trillion by 2030. At those levels, the world would be roughly on track for a 2°C warming pathway — not ideal, but dramatically better than the 3.5°C trajectory we were on a decade ago.
The money is flowing. The technology is working. The economics are favorable. The remaining challenge is execution: building projects faster, reforming permitting systems, expanding the skilled workforce, and ensuring that the benefits of the clean energy transition reach everyone.
A trillion dollars is just the beginning.