According to Mercom Capital Group’s newly released Annual and Q4 2024 Funding and M&A Report for Storage & Grid, corporate funding for energy storage companies, including VC investments, public market funding, and debt financing, increased 5% year-over-year (YoY).

Corporate funding for energy storage companies grew to $19.9 billion in 116 deals in 2024, compared to $19 billion in 120 deals in 2023.

Global Venture Capital (VC) funding in the energy storage sector in 2024 decreased 60% YoY, with $3.7 billion in 84 deals compared to $9.2 billion in 86 deals in 2023.

“There was considerable uncertainty in the U.S. in Q4 due to the elections and speculation about potential policy changes. As a result, many investors chose to adopt a ‘wait-and-see’ approach regarding new policies from the incoming administration,” said Raj Prabhu, CEO of Mercom Capital Group.

“While most policies were favorable until the end of the year, higher inflation, rising interest rates, labor shortages, and increased labor costs posed challenges. Component costs also rose, and there was always the looming threat of new tariffs, which made the situation more unpredictable.”

In 2024, lithium-ion-based battery technology received the highest amount of VC funding. Materials and component providers, iron-air battery providers, battery recycling companies, and metal-hydrogen battery companies were other top-funded categories.

The top VC deals in 2024 were Form Energy’s $405 million, Sila Nanotechnologies’ $375 million, EnerVenue Holdings’ $308 million, Natron Energy’s $189 million, and Ascend Elements’ $162 million.

In 2024, announced debt and public market financing for energy storage companies saw a 65% YoY increase. A total of $16.2 billion was raised in 32 deals, compared to $9.8 billion in 34 deals in 2023.

“On the brighter side, mergers and acquisitions (M&A) activity was up, both for corporate and project-level M&A. Some of these deals closed towards the end of the year,” said Prabhu.

“Energy storage projects have become increasingly valuable. The demand is partly driven by data centers and AI, which require reliable, 24/7 power. For these data centers to use renewable energy, they also need energy storage solutions to ensure uninterrupted power supply. This growing need for energy storage has boosted the value of such projects,” he added.

In 2024, 38 energy storage projects were acquired, an increase from 2023, which saw 28 project M&A transactions.

The number of companies acquired in 2024 was 25, compared to 15 in 2023.

Smart Grid

VC funding in the smart grid sector increased 13%, with $1.7 billion in 56 deals compared to $1.5 billion in 47 deals in 2023.

Corporate funding for smart grid companies in 2024 was down by 27%, with $2.4 billion in 67 deals compared to $3.3 billion in 60 deals in 2023.

“Most of the smart grid funding has focused on smart charging, particularly electric vehicles (EV) charging infrastructure. This interest is driven by EV mandates, incentives, and rising demand for EV. However, concerns are emerging about the potential removal of EV incentives,” Prabhu said.

Smart charging companies, along with data analytics, distributed generation and integration, demand response, and grid optimization, raised most of the VC funding.

The top five smart grid VC funding deals in 2024 were Electra with $330 million, Powerdot with $108 million, FLO with $100 million, Monta with $87 million, and Battery Smart with $65 million.

A total of 11 debt and public market financing deals, totaling $718 million, were announced, compared to $1.8 billion in 13 deals in 2023.

The year saw 10 M&A transactions in the smart grid sector, compared to 11 in 2023.

On the outlook for 2025, Prabhu said, “The industry is still digesting the new administration’s actions. We already see executive orders, like ending EV subsidies. Many new rules are being announced, and it will take time for the sector to fully understand how these changes will affect different segments.”

The report contains 142  pages, to get a copy, visit: https://mercomcapital.com/product/annual-q4-2024-funding-ma-report-storage-grid/