The Shifting Landscape of Renewable Startups in Europe

Our analysis revealed:

• Heavy Capital Concentration: European startups involved in the development of energy storage hardware have now raised a cumulative €2.14 billion in equity funding, with 84.4% of those funds arriving in the last five years (2021-2025).

• Short-Duration Settled on BESS: Lithium-ion battery energy storage systems (BESS) have largely emerged as the dominant technology in the market. BESS startups have secured €331.8 million in investment, spanning Lithium-based systems (€236m), Redox flow batteries (€76.1m), and emerging Zinc-ion (€1.8m) and hybrid chemistries (€17m).

• The Long-Duration Frontier: Mechanical solutions have raised a cumulative €696.7 million in funding, with most of that going to two companies offering long-duration storage: €339 million for High View Power’s liquid air energy storage and €200.5 million for Energy Vault’s gravity storage solutions. Both companies are now publicly traded, with the gravity solution securing an additional $500 million USD post-IPO. An additional €90.2 million went to Energy Dome for its thermomechanical ‘CO2 batteries’, alongside smaller amounts for companies developing compressed-air storage and flywheels.

• Thermal Energy Storage (TES): Thermal technologies received €105.9 million, as well as a further €20 million in funding for companies offering products with in-built thermal storage, like industrial heat pumps, solar/TES combinations, and commercial refrigeration.

• Supply Chain and Next-Gen Manufacturing: Capital is also strengthening the domestic ecosystem, with €113.2 million raised for next-gen battery chemistries and €89 million for the production of battery cells, modules, and packs.

What it means for innovation: In storage, investors are still willing to make large bets on raw hardware and physics. The primary engineering bottleneck remains scaling the core technology itself.

Wind Energy: Shifting from Turbines to Intelligence

The wind sector has matured beyond startups trying to reinvent standard generation hardware. Instead, innovation is pivoting toward software optimisation and hardware engineered for specific alternative environments.

Our analysis revealed:

• The Decline of the Conventional: In the late '90s (1996–2000), 64% of newly founded wind startups focused on the development of conventional (horizontal-axis) turbines and their core components. From 2021 to 2025, that figure dropped to just 14%. Instead, founders shifted to focus on software and alternative turbine designs.

• The Rise of Digital Intelligence: 49% of new startups in wind energy now focus entirely on software and sensors, raising a cumulative €83.5 million to date. These companies are taking aim at site optimisation and operational bottlenecks, with 31% of software startups in the space focusing on wind measurement and energy forecasting, 29% on turbine monitoring and inspection, and 26% on performance optimisation and predictive maintenance.

• Alternative Turbine Environments: 37% of new wind energy startups in Europe are developing alternative turbine concepts. Rather than competing with utility-scale OEM turbine manufacturers, these founders are building for environments where traditional infrastructure is not a good fit. Vertical-axis designs were the only main alternative initially offered, but the market has since broadened, with airborne kites accounting for 33% of new entrants over the past 10 years, alongside conical, spherical, bladeless, and multi-rotor designs. Capital is favouring offshore propositions, highlighted by a €15m grant for Sweden’s SeaTwirl (floating vertical-axis turbine) and €9.6m in equity for Norway’s Wind Catching System (a multi-rotor array).

What it means for innovation: The standard wind turbine appears to be a solved problem for founders looking for a way into the market. Considerably more opportunity lies within the intelligence layer – making existing systems smarter, safer, and ecologically compliant – or engineering alternative hardware layouts to capture wind where traditional turbines are not a good fit.

Solar Energy: Solving Bottlenecks in a Standardised Market

Solar represents the most mature market of the three. Because the industry has largely mastered the production of cheap PV modules, the days of venture capital funding standard panel manufacturers look to be over. Today, solar startups are turning to solve the systemic bottlenecks caused by the solar boom itself, as well as more innovative PV designs and alternative applications.

Our analysis revealed:

• The Funding Rollercoaster: Spurred by energy security concerns following Russia's invasion of Ukraine, European solar startup funding peaked at a record €285 million in 2023, but then plummeted to a decade-low of €24 million in 2025, before stabilising with €82 million (so far) in 2026.

• Highly Selective, Early-Stage Bets: 93% of the funding that returned to the market in 2026 went to early-stage companies, including 5 deals over €10m. Investors are looking past unproven seed concepts and capital-intensive late-stage growth, instead choosing to fund proven tech with market validation and room to grow. Mergers and Acquisitions are also on the rise as larger companies seek to consolidate their offerings across the value chain.

• Solving Problems Within the Current System: Rather than competing on PV module manufacturing, capital is moving toward startups that smooth out friction at the installation site. The 2026 transaction data reveals a clear pattern of system solvers: