Experts: To power an energy revolution, a financing evolution is needed

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Investors in Houston and across Texas are proving to be transformational partners to finance and grow energy hardware startups. Photo via Getty Images

Texas is a national leader in wind and solar, generating more energy in these categories than any other state since 2006 and double that of next placed California. As investment in renewable energy continues to skyrocket, the limitations of the 19th-century grid prevent the industry from realizing the benefits of this 21st-century technology.

For years, Texas has grappled with insufficient infrastructure for its current mix of energy sources, which includes surging renewables. The Alternating Current (AC) grid — the standard since the 1800s — requires matching supply and demand in real-time to maintain a stable frequency, which is complex and costly, especially with renewable energy when the sun doesn’t always shine and the wind doesn’t always blow.

Startup firms are busy developing technologies to solve this issue. For example, it’s possible to modernize the AC grid to control the voltage of the distribution network precisely, to ensure fast adjustments to demand, and to adapt to changes in supply from renewables. Enoda, a U.K.-based scale-up, is an example of an innovative company developing and delivering technology to enable the AC grid to accommodate much higher levels of renewable energy and electrification.

Equally important to these technical innovations are innovations in financing for energy startups. On two levels, investors in Houston and across Texas are proving to be transformational partners to finance and grow energy hardware startups.

1. Innovative Funding Structures

Because of the long timelines, hardware investing requires, in part, more patient capital than the typical Silicon Valley venture capital model prevalent in startup investments. Their playbook is best suited for software companies that develop new features in weeks or months. Energy hardware startups require a longer timeline because of the far greater complexity and upfront capital outlay.

Texas investment firms and family offices are, however, accustomed to investing in complex energy projects with longer development timelines. This complexity presents a high barrier to entry for competitors, which significantly increases the upside potential that risk-capital investors seek should the innovation find market traction. At the same time, up-front capital requirements have decreased considerably, making hardware more appealing to investors.

2. Visionary partnership

Attracting investors and demonstrating early-stage traction differs for hardware companies because of the lengthy pre-revenue R&D process. Software innovators can launch with a minimum viable product, gain a few early customers, and then grow incrementally. By contrast, energy hardware technology must be fully developed from launch. Each Enoda PRIME exchanger, from the first unit sold, represents a piece of critical infrastructure on which households will rely for their electricity supply for its 30-year lifespan. For venture investors who focus on software, it’s easy to assess the health of a software company based on well-established metrics related to customer growth and the cost of customer acquisition.

Hardware investing requires investors to have a much deeper understanding of the problem being solved and assess the quality of the solution objectively rather than rely on early customers for a minimum viable product. Texas investors have been quick to understand the problems that the energy industry must solve around energy balancing and keeping the frequency of a system stable in order to grow renewable energy. Why the keen insight? Because that problem is being solved today by gas power plants. A visionary investor with many years of deep industry perspective is far more likely to appreciate that than a VC firm looking across many industries based on a standard set of metrics.

Visionary partnership is precisely what energy startups need because it’s important not to evaluate the company as it is today but what it will be in five years. Hardware startups need visionary investor partners who understand the importance of parallel pathing fundamental innovation, product development and delivery, and customer development to grow and succeed. Hardware startups succeed only when they can do these things simultaneously—and require investors who can imagine a possible future and understand the path to reach it.

Changing the way investment works

Many energy startups are worthy inheritors of Houston’s bold entrepreneurial spirit that led to technological innovations like deep-sea drilling and hydraulic fracturing. They will continue to need equally bold investors who recognize the world of opportunities at their doorstep.

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Paul Domjan is the founder and chief policy and global affairs officer at Enoda. Derek Jones and Paul Morico are partners at Baker Botts.

Aggreko’s Energy Transition Solutions division acquired a portfolio of nine community solar projects in the state of New York. Photo courtesy of Aggreko

Houston solar company secures 9 New York solar projects

solar solutions

A Houston-based energy solution company has made some big moves on the East Coast.

Aggreko’s Energy Transition Solutions division acquired a portfolio of nine community solar projects in the state of New York.

The ground-mounted installations will total approximately 59 MW of generating capacity Aggreko ETS also successfully connected the first of the nine projects to the grid, a 5.9 MWdc project in the town of Vernon, 40 miles east of Syracuse.

The nine community solar sites aim to assist low-and-moderate income New Yorkers in benefiting from clean solar energy without residential solar installations.

Aggreko ETS will be in charge of the construction of these projects. Aggreko, which is headquartered in Houston, is actively investing in more sustainable products, fuels, innovative technology, and services to make greener solutions accessible.

“We’re thrilled to complete this important transaction, which reinforces Aggreko’s capabilities as an experienced renewable energy developer, owner, and operator that can deftly structure and execute complicated asset acquisitions to scale its business,” says Prashanth Prakash, Aggreko ETS’s chief commercial officer in a news release.

According to a report, In the fourth quarter, Texas is expected to add about 3.7 gigawatts of solar capacity — more than the combined total for the previous three quarters. Photo via Getty Images

Report: Texas expected to shine as top state for solar installations in 2023

fourth quarter push

When all the numbers are tallied, 2023 should be a very sunny year for solar installations in Texas.

The Solar Energy Industries Association, SEIA, and energy research and consulting firm Wood Mackenzie predict Texas will be the top state for solar installations in 2023. In the fourth quarter, Texas is expected to add about 3.7 gigawatts of solar capacity — more than the combined total for the previous three quarters.

In 2021, Texas added nearly 6.07 gigawatts of solar capacity, with that figure falling to more than 3.66 gigawatts in 2022. But for 2023, SEIA and Wood Mackenzie anticipate Texas having added almost 6.24 gigawatts of solar capacity for residential, business, and utility customers.

A report released last week by SEIA and Wood Mackenzie indicates that sales volume for solar installations has declined in Texas and some other states due in part to higher costs for financing solar equipment. Solar sales volume in Texas started dropping off in late 2022 and has continued to shrink, says the report.

Wood Mackenzie forecasts 13 percent growth for the U.S. residential solar market in 2023. The report predicts the U.S. will have added 33 gigawatts of residential solar capacity in 2023, up from a record-setting 6.5 gigawatts in 2022. The U.S. added 6.5 gigawatts of residential solar capacity in the third quarter of 2023 alone, says the report.

“Solar remains the fastest-growing energy source in the United States, and despite a difficult economic environment, this growth is expected to continue for years to come,” says Abigail Ross Hopper, president and CEO of SEIA. “To maintain this forecasted growth, we must modernize regulations and reduce bureaucratic roadblocks to make it easier for clean energy companies to invest capital and create jobs.”

Solar accounted for nearly half (48 percent) of all new electric-generating capacity during the first three quarters of 2023, bringing total installed solar capacity in the U.S. to 161 gigawatts across 4.7 million installations. By 2028, U.S. solar capacity is expected to reach 377 gigawatts, enough to power more than 65 million homes.

“The U.S. solar industry is on a strong growth trajectory, with expectations of 55 percent growth this year and 10 percent growth in 2024,” says Michelle Davis, head of solar research at Wood Mackenzie.

“Growth is expected to be slower starting in 2026 as various challenges like interconnection constraints become more acute,” she adds. “It’s critical that the industry continue to innovate to maximize the value that solar brings to an increasingly complex grid. Interconnection reform, regulatory modernization, and increasing storage attachment rates will be key tools.”

BP's solar park is scheduled to begin operating in the second half of 2024. Photo via bp.com

BP breaks ground on Texas solar farm, plans to open it next year

sun-powered peacock

British energy giant BP, whose U.S. headquarters is in Houston, has started construction on a 187-megawatt solar farm about 10 miles northeast of Corpus Christi.

The Peacock Solar facility will generate power for a nearby chemical complex operated by Gulf Coast Growth Ventures, a joint venture between Spring-based energy company ExxonMobil and SABIC, a Saudi Arabian chemical conglomerate whose products are used to make clothes, food containers, packaging, agricultural film, and construction materials. SABIC’s Americas headquarters is in Houston.

Gulf Coast Growth Ventures opened the plant in 2022. The joint venture says the ethylene cracker and derivatives complex, located northwest of the town of Gregory, employs about 600 people.

BP says the solar project, which is expected to create about 300 construction jobs, will produce enough energy each year to power the equivalent of 34,000 homes. The solar park is scheduled to begin operating in the second half of 2024.

“We want to be good stewards of our environment,” Paul Fritsch, president of Gulf Coast Growth Ventures, says in a BP news release. “Once online, the solar-generated electricity will be used to partially power our plant and help reduce emissions in support of a net-zero future.”

At full capacity, Peacock’s renewable power could keep more than 256,000 metric tons of greenhouse gas emissions out of the atmosphere each year, BP says.

BP’s joint venture partner, British solar company Lightsource BP, is developing the solar project and managing construction on behalf of BP. In 2017, BP bought a 43 percent stake in Lightsource and now holds a 50 percent stake.

Canadian contractor PCL Construction is providing construction and engineering services for the solar setup, and Tempe, Arizona-based First Solar and Norwalk, Connecticut-based GameChange Solar are supplying the solar equipment.

Energy sources are often categorized as renewable or not, but perhaps a more accurate classification focuses on the type of reaction that converts energy into useful matter. Photo by simpson33/Getty Images

How is energy produced?

ENERGY 101

Many think of the Energy Industry as a dichotomy–old vs. new, renewable vs. nonrenewable, good vs. bad. But like most things, energy comes from an array of sources, and each kind has its own unique benefits and challenges. Understanding the multi-faceted identity of currently available energy sources creates an environment in which new ideas for cleaner and more sustainable energy sourcing can proliferate.

At a high level, energy can be broadly categorized by the process of extracting and converting it into a useful form.

Energy Produced from Chemical Reaction

Energy derived from coal, crude oil, natural gas, and biomass is primarily produced as a result of bonds breaking during a chemical reaction. When heated, burned, or fermented, organic matter releases energy, which is converted into mechanical or electrical energy.

These sources can be stored, distributed, and shared relatively easily and do not have to be converted immediately for power consumption. However, the resulting chemical reaction produces environmentally harmful waste products.

Though the processes to extract these organic sources of energy have been refined for many years to achieve reliable and cheap energy, they can be risky and are perceived as invasive to mother nature.

According to the 2022 bp Statistical Review of World Energy, approximately 50% of the world’s energy consumption comes from petroleum and natural gas; another 25% from coal. Though there was a small decline in demand for oil from 2019 to 2021, the overall demand for fossil fuels remained unchanged during the same time frame, mostly due to the increase in natural gas and coal consumption.

Energy Produced from Mechanical Reaction

Energy captured from the earth’s heat or the movement of wind and water results from the mechanical processes enabled by the turning of turbines in source-rich environments. These turbines spin to produce electricity inside a generator.

Solar energy does not require the use of a generator but produces electricity due to the release of electrons from the semiconducting materials found on a solar panel. The electricity produced by geothermal, wind, solar, and hydropower is then converted from direct current to alternating current electricity.

Electricity is most useful for immediate consumption, as storage requires the use of batteries–a process that turns electrical energy into chemical energy that can then be accessed in much the same way that coal, crude oil, natural gas, and biomass produce energy.

Energy Produced from a Combination of Reactions

Hydrogen energy comes from a unique blend of both electrical and chemical energy processes. Despite hydrogen being the most abundant element on earth, it is rarely found on its own, requiring a two-step process to extract and convert energy into a usable form. Hydrogen is primarily produced as a by-product of fossil fuels, with its own set of emissions challenges related to separating the hydrogen from the hydrocarbons.

Many use electrolysis to separate hydrogen from other elements before performing a chemical reaction to create electrical energy inside of a contained fuel cell. The electrolysis process is certainly a more environmentally-friendly solution, but there are still great risks with hydrogen energy–it is highly flammable, and its general energy output is less than that of other electricity-generating methods.

Energy Produced from Nuclear Reaction

Finally, energy originating from the splitting of an atom’s nucleus, mostly through nuclear fission, is yet another way to produce energy. A large volume of heat is released when an atom is bombarded by neutrons in a nuclear power plant, which is then converted to electrical energy.

This process also produces a particularly sensitive by-product known as radiation, and with it, radioactive waste. The proper handling of radiation and radioactive waste is of utmost concern, as its effects can be incredibly damaging to the environment surrounding a nuclear power plant.

Nuclear fission produces minimal carbon, so nuclear energy is oft considered environmentally safe–as long as strict protocols are followed to ensure proper storage and disposal of radiation and radioactive waste.

Nuclear to Mechanical to Chemical?

Interestingly enough, the Earth’s heat comes from the decay of radioactive materials in the Earth’s core, loosely linking nuclear power production back to geothermal energy production.

It’s also clear the conversion of energy into electricity is the cleanest option for the environment, yet adequate infrastructure remains limited in supply and accessibility. If not consumed immediately as electricity, energy is thus converted into a chemical form for the convenience of storage and distribution it provides.

Perhaps the expertise and talent of Houstonians serving the flourishing academic and industrial sectors of energy development will soon resolve many of our current energy challenges by exploring further the circular dynamic of the energy environment. Be sure to check out our Events Page to find the networking event that best serves your interest in the Energy Transition.

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Lindsey Ferrell is a contributing writer to EnergyCapitalHTX and founder of Guerrella & Co.

Going solar is now easier thanks to city and federal help. Photo courtesy of Houston Solar Tour

Houston charges up new program to help locals buy and install affordable solar panels

sunny days

Alternative-energy-seeking locals now have a sunny way to buy into a solar. The City of Houston has launched Texas Solar Switch Houston, a new program aimed at helping Houstonians purchase and install rooftop solar panels and battery storage.

In partnership with Solar United Neighbors, the Solar Switch program offers hassle-free way to purchase solar panels by creating a massive, group discount for residents, be it home or small business needs.

This comes with the new Inflation Reduction Act’s clean energy incentives and is part of the City of Houston's Climate Action Plan goal to generate 5 million MWh per year of local solar, per a press release. Customers who install solar also receive a 30-percent tax credit, thanks to the The Inflation Reduction Act.

Registration for the program is free and available online. The City of Houston assures that there is "no obligation for homeowners to purchase solar panels." Discounts and installers are determined through a competitive auction process, per the City.

"With energy prices increasing, homeowners and small businesses are looking for opportunities to save on their energy bills and increase their resilience to climate-related events," said Mayor Sylvester Turner. "Texas Solar Switch Houston provides our community with a simple and straightforward way to become better informed about solar energy and access a competitive offer from a vetted, experienced solar installation company."

Signed and passed into law by the Biden Administration in August, the Inflation Reduction Act will invest some $369 billion in domestic energy production and manufacturing with a goal of reducing carbon emissions by 40 percent by 2030. That federal mandate means locals can now take steps towards power backup, while potentially easing up on the beleaguered Texas grid.

“More and more Houstonians are looking to solar and battery storage for self-sufficiency, which has the added benefit of making our grid more resilient,” said Hanna Mitchell, Texas program director for Solar United Neighbors, in a statement. “With the recent passage of the IRA, now is a particularly good time to go solar.”

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This article originally ran on CultureMap.

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Houston energy expert looks ahead to climate tech trends of 2026

Guest Column

There is no sugar‑coating it: 2025 was a rough year for many climate tech founders. Headlines focused on policy rollbacks and IRA uncertainty, while total climate tech venture and growth investment only inched up to about 40.5 billion dollars, an 8% rise that felt more like stabilization than the 2021–2022 boom. Deal count actually fell 18% and investor participation dropped 19%, with especially steep pullbacks in carbon and transportation, as capital concentrated in fewer, larger, “safer” bets. Growth-stage funding jumped 78% while early-stage seed rounds dropped 20%.

On top of that, tariff battles and shifting trade rules added real supply‑chain friction. In the first half of 2025, solar and wind were still 91% of new U.S. capacity additions, but interconnection delays, equipment uncertainty, and changing incentive structures meant many projects stalled or were repriced mid‑stream. Founders who had raised on 2021‑style valuations and policy optimism suddenly found themselves stuck in limbo, extending runway or shutting down.

The bright spots were teams positioned at the intersection of climate and the AI power surge. Power demand from data centers is now a primary driver of new climate‑aligned offtake, pulling capital toward firm, 24/7 resources. Geothermal developers like Fervo Energy, Sage Geosystems and XGS did well. Google’s enhanced‑geothermal deal in Nevada scales from a 3.5 MW pilot to about 115 MW under a clean transition tariff, nearly 30× growth in geothermal capacity enabled by a single corporate buyer. Meta and others are exploring similar pathways to secure round‑the‑clock low‑carbon power for hyperscale loads.

Beyond geothermal, nuclear is clearly back on the strategic menu. In 2024, Google announced the first U.S. corporate nuclear offtake, committing to purchase 500 MW from Kairos Power’s SMR fleet by 2035, a signal that big tech is willing to underwrite new firm‑power technologies when the decarbonization and reliability story is compelling. Meta just locked in 6.6GW of nuclear capacity through deals with Vistra, Oklo, and TerraPower.

Growth investors and corporates are increasingly clustering around platforms that can monetize long‑duration PPAs into data‑center demand rather than purely policy‑driven arbitrage.

Looking into 2026, the same trends will continue:

Solar and wind

Even with policy headwinds, solar and wind continue to dominate new capacity. In the first half of 2025 they made up about 90% of new U.S. electricity capacity. Over the 2025–2028 period, FERC’s ‘high‑probability’ pipeline points to on the order of 90–93 GW of new utility‑scale solar and roughly 20–23 GW of new wind, far outpacing other resources.

Storage and flexibility

Solar plus batteries is now the default build—solar and storage together account for about 81% of expected 2025 U.S. capacity additions, with storage deployments scaling alongside renewables to keep grids flexible. Thermal storage and other grid‑edge flexibility solutions are also attracting growing attention as ways to smooth volatile load.

EVs and transport

EV uptake continues to anchor long‑term battery demand; while transportation funding cooled in 2025, EV sales and charging build‑out are still major components of clean‑energy demand‑side investment

Buildings

Heat pumps, smart HVAC, and efficient water heating are now the dominant vectors for building‑sector decarbonization. Heating and cooling startups alone have raised billions since 2020, with nearly 700 million dollars going into HVAC‑focused companies in 2024, and that momentum carried into 2025.

Hydrogen

The green hydrogen narrative has faded, but analysts still see hydrogen as essential for steel, chemicals, and other hard‑to‑abate sectors, with large‑scale projects and offtake frameworks under development rather than headline hype.

CCS/CCUS

After years of skepticism, more large CCS projects are finally reaching FID and coming online, helped by a mix of tax credits and industrial demand, which makes CCS look more investable than it did in the pre‑IRA era.

So, yes, 2025 was a downer from the easy‑money, policy‑euphoria years. But the signal beneath the noise is clear: capital is rotating toward technologies with proven unit economics, real offtake (especially from AI‑driven power loads), and credible paths to scale—not away from climate altogether.

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Nada Ahmed is the founding partner at Houston-based Energy Tech Nexus.

Houston startup advances methane tech, sets sights on growth capital

making milestones

Houston-based climatech startup Aquanta Vision achieved key milestones in 2025 for its enhanced methane-detection app and has its focus set on future funding.

Among the achievements was the completion of the National Science Foundation’s Advanced Sensing and Computation for Environmental Decision-making (ASCEND) Engine. The program, based in Colorado and Wyoming, awarded a total of $3 million in grants to support the commercialization of projects that tackle critical resilience challenges, such as water security, wildfire prediction and response, and methane emissions.

Aquanta Vision’s funding went toward commercializing its NETxTEN app, which automates leak detection to improve accuracy, speed and safety. The company estimates that methane leaks cost the U.S. energy industry billions of dollars each year, with 60 percent of leaks going undetected. Additionally, methane leaks account for around 10 percent of natural gas's contribution to climate change, according to MIT’s climate portal.

Throughout the months-long ASCEND program, Aquanta Vision moved from the final stages of testing into full commercial deployment of NETxTEN. The app can instantly identify leaks via its physics-based algorithms and raw video output of optical gas imaging cameras. It does not require companies to purchase new hardware, requires no human intervention and is universally compatible with all optical gas imaging (OGI) cameras. During over 12,000 test runs, 100 percent of leaks were detected by NETxTEN’s system, according to the company.

The app is geared toward end-users in the oil and gas industry who use OGI cameras to perform regular leak detection inspections and emissions monitoring. Aquanta Vision is in the process of acquiring new clients for the app and plans to scale commercialization between now and 2028, Babur Ozden, the company’s founder and CEO, tells Energy Capital.

“In the next 16 months, (our goal is to) gain a number of key customers as major accounts and OEM partners as distribution channels, establish benefits and stickiness of our product and generate growing, recurring revenues for ourselves and our partners,” he says.

The company also received an investment for an undisclosed amount from Marathon Petroleum Corp. late last year. The funding complemented follow-on investments from Ecosphere Ventures and Odyssey Energy Advisors.

Ozden says the funds will go toward the extension of its runway through the end of 2026. It will also help Aquanta Vision grow its team.

Ozden and Marcus Martinez, a product systems engineer, founded Aquanta Vision in 2023 and have been running it as a two-person operation. The company brought on four interns last year, but is looking to add more staff.

Ozden says the company also plans to raise a seed round in 2027 “to catapult us to a rapid growth phase in 2028-29.”

HETI discusses Houston’s energy leadership, from pathways to progress

The View From HETI

In 2024, RMI in collaboration with Mission Possible Partnership (MPP) and the Houston Energy Transition Initiative (HETI) mapped out ambitious scenarios for the region’s decarbonization journey. The report showed that with the right investments and technologies, Houston could achieve meaningful emissions reductions while continuing to power the world. That analysis painted a picture of what could be possible by 2030 and 2050.

Today, the latest HETI progress report shows Houston is not just planning anymore — the region is delivering.

Real results, right now

The numbers tell a compelling story. Since 2017, HETI’s member companies have invested more than $95 billion in low-carbon infrastructure, technologies, and R&D. That’s not a commitment for the future—that’s capital deployed, projects built, and operations transformed.

The results showed industry-wide reductions of 20% in total Scope 1 greenhouse gas emissions and a remarkable 55% decrease in methane emissions from global operations. These aren’t projections—they’re actual reductions happening across refineries, chemical plants, and production facilities throughout the Houston region.

How Houston is leading

What makes Houston’s approach work is its practical, technology-driven focus. Companies across the energy value chain are implementing solutions that work today:

Electrifying operations and integrating renewable power

Deploying advanced methane detection and elimination technologies

Upgrading equipment for greater efficiency

Capturing and storing carbon at commercial scale

Developing breakthrough technologies from geothermal to advanced nuclear

Take ExxonMobil’s Permian Basin electrification, Shell and Chevron’s lower-carbon Whale project, or BP’s massive Tangguh carbon capture project in Indonesia. These aren’t pilot programs—they’re multi-billion dollar investments demonstrating that decarbonization and energy production go hand in hand.

From scenarios to strategy

The RMI analysis identified three key pathways forward: enabling operational decarbonization, accelerating low-carbon technology scale-up, and creating carbon accounting mechanisms. Houston’s energy leaders have embraced all three.

The momentum is undeniable. Companies are setting ambitious 2030 and 2050 targets with clear roadmaps. New projects are reaching final investment decisions. Innovation ecosystems are flourishing. And critically, this progress is creating jobs and driving economic growth across the region.

Why this matters

Houston isn’t just managing the energy transition—it’s proving what’s possible when you combine world-class engineering expertise, integrated infrastructure, access to capital, and a commitment to both energy security and emissions reduction.

The dual challenge of delivering more energy with less emissions isn’t theoretical in Houston—it’s operational reality. Every ton of CO₂ reduced, every efficiency gain achieved, and every technology deployed demonstrates that we can meet growing global energy demand while making measurable progress on climate goals.

The path forward

The journey from last year’s scenarios to this year’s results shows something crucial: when industry, policymakers, and communities align around practical solutions, transformation accelerates.

Houston’s energy leadership isn’t about choosing between reliable energy and environmental progress, it’s about delivering both. And based on the progress we’re seeing, the momentum is only building.

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Read the full analysis here. This article originally appeared on the Greater Houston Partnership's Houston Energy Transition Initiative blog . HETI exists to support Houston's future as an energy leader. For more information about the Houston Energy Transition Initiative, EnergyCapitalHTX's presenting sponsor, visit htxenergytransition.org.

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