Sustainability Atlas
Clean Energy·12 min read··...

Trend watch: Renewables innovation (solar, wind, geothermal) in 2026 — signals, winners, and red flags

Signals to watch, value pools, and how the landscape may shift over the next 12–24 months. Focus on implementation trade-offs, stakeholder incentives, and the hidden bottlenecks.

In 2024, the renewable energy sector shattered records that seemed implausible just five years ago. Global renewable capacity reached 4,448 GW—a 15.1% increase from 2023—with solar alone adding an unprecedented 452 GW, representing 77% of all new renewable installations (IRENA, 2025). Perhaps more telling: 91% of new renewable projects now cost less than their fossil fuel alternatives, with onshore wind 53% cheaper and solar PV 41% cheaper than the lowest-cost conventional options (IRENA Cost Report, 2024). Yet behind these headline figures lie critical bottlenecks, geographic disparities, and technology race dynamics that will define winners and losers over the next 12–24 months.

Why It Matters

The renewable energy transformation has moved from policy aspiration to economic inevitability. Clean energy investment now stands at $2.2 trillion annually—double the capital flowing to fossil fuels (IEA World Energy Investment, 2025). For investors and operators, this creates both unprecedented opportunity and concentrated risk.

Three structural shifts demand attention in 2026:

Grid infrastructure has become the binding constraint. Over 1,650 GW of renewable projects—equivalent to more than 35% of current global capacity—sit waiting for grid connection (IEA Renewables 2025). The $400 billion invested annually in transmission and distribution falls far short of the $1 trillion needed to match generation expansion. This mismatch creates stranded asset risk for developers and opportunity for transmission-focused infrastructure funds.

Geographic concentration amplifies systemic risk. China now accounts for 88% of Asia's renewable growth and nearly one-third of global clean energy investment (IEA, 2025). While this has driven manufacturing cost reductions of 60% for solar panels and 50% for wind turbines since 2022, it also creates supply chain vulnerability and trade friction. The US forecast for renewable additions has been revised down 50% due to tariffs, tax credit phase-outs, and FEOC (Foreign Entity of Concern) restrictions.

Baseload-capable renewables are emerging. Enhanced geothermal systems (EGS) and advanced energy storage are finally proving commercial viability, fundamentally changing the calculus for grid operators who have long questioned renewable reliability.

Key Concepts

The Tandem Cell Revolution in Solar

Silicon solar cells are approaching their theoretical efficiency limit of 29.4% (the Shockley-Queisser limit). The breakthrough comes from perovskite-silicon tandem architectures, which stack a perovskite layer atop conventional silicon to capture different wavelengths of light. In April 2025, LONGi achieved a certified 34.85% efficiency—more than a decade ahead of the DOE's 2035 "Advanced Technology" targets (LONGi, 2025). The theoretical limit for tandem cells extends to 43%, suggesting substantial runway for continued improvement.

Enhanced Geothermal Systems (EGS)

Traditional geothermal power requires rare natural hydrothermal reservoirs. EGS creates artificial reservoirs by drilling horizontally into hot rock formations and circulating fluid, using techniques pioneered in oil and gas fracking. The key breakthrough: Fervo Energy achieved 107 kg/s flow rates at temperatures exceeding 220°C in 2024, enabling greater than 10 MW of electric production per well—triple the output of their earlier Project Red pilot (Fervo Energy, 2024). This transforms geothermal from a niche baseload source to a scalable, dispatchable technology with potential to provide 24/7 carbon-free power for data centers and industrial loads.

Offshore Wind Scaling

The turbine upscaling race continues, with Western manufacturers deploying 15 MW turbines commercially while Chinese competitors test 26 MW prototypes. Siemens Gamesa's 21.5 MW prototype—featuring a 276-meter rotor diameter—completed final blade installation in April 2025 at the Østerild test center in Denmark (Siemens Gamesa, 2025). Floating wind technology is unlocking deepwater sites previously inaccessible to fixed-bottom installations, with the Hywind Tampen project (88 MW) demonstrating commercial viability for oil platform decarbonization.

What's Working and What Isn't

What's Working

Manufacturing cost deflation continues. Solar module spot prices reached $0.09/Wdc globally in Q1 2025, driven by massive Chinese manufacturing overcapacity exceeding 1,100 GW of annual production capacity against approximately 600 GW of demand (NREL Spring 2025 Update). While this creates margin pressure for manufacturers, it accelerates deployment economics for project developers.

Distributed solar captures growing market share. Residential and commercial-scale solar now represents 42% of global PV expansion, with corporate PPAs and merchant plants accounting for another 30% of capacity growth through 2030 (IEA Renewables 2025). This diversification reduces dependence on utility-scale project pipelines vulnerable to permitting delays.

Geothermal drilling efficiency is improving rapidly. Fervo achieved a 70% year-over-year reduction in drilling times between their Project Red and Cape Station developments, translating techniques from oil and gas horizontal drilling to clean energy applications. Their 18-month project timelines now rival solar farm construction speeds.

Solar and wind generation surpassed hydropower for the first time in 2024. Combined solar and wind produced more electricity globally than hydropower, with renewables set to overtake coal as the largest electricity source by 2025 (Ember Global Electricity Review, 2025).

What Isn't Working

Offshore wind faces systemic headwinds. Global offshore wind forecasts have been revised down 27%, with EU forecasts cut 24% due to auction failures, cost overruns, and project cancellations (IEA Renewables 2025). Supply chain constraints, higher interest rates, and inflation in turbine component costs have made many projects uneconomic under existing contract structures.

Solar manufacturing is operating at negative margins. The same overcapacity driving deployment benefits is forcing manufacturers to sell below production cost. Supply chain investment crashed 72% year-over-year in 2024, with solar PV factory investment dropping from $24.5 billion to approximately $7 billion. This consolidation wave will likely concentrate production among the largest Chinese players.

Financing remains concentrated in wealthy nations. Ninety percent of renewable investment flows to advanced economies plus China, with Africa and Latin America representing less than 3% of global additions despite abundant resource potential. The financing cost disparity is stark: European projects access capital at 3.8%, while African projects face 12% cost of capital—tripling levelized costs for identical technology (IRENA Global Landscape, 2025).

The COP28 tripling target looks increasingly unlikely. Reaching 11,200 GW of renewable capacity by 2030 requires 1,122 GW of annual additions—nearly double 2024's record 582 GW. Current trajectories point toward approximately 9,760 GW by 2030, falling 800 GW short of the target.

Key Players

Established Leaders

LONGi Green Energy (China): The world's largest solar manufacturer, holding multiple efficiency records including the 34.85% perovskite-silicon tandem certified in April 2025. Market leader in monocrystalline silicon wafers and vertically integrated module production.

Vestas (Denmark): Leads Western offshore wind deployment with the V236-15.0 MW turbine, securing 13+ GW of firm orders globally. Key projects include the 960 MW He Dreiht farm in Germany and 810 MW Empire Wind 1 in New York.

Siemens Gamesa (Germany/Spain): Pioneer in floating offshore wind through the Hywind Tampen project with Equinor. Currently testing the 21.5 MW prototype that represents the most powerful wind turbine ever installed.

NextEra Energy (USA): The largest renewable energy generator in North America, with 32 GW of wind and solar assets under management and a development pipeline exceeding 50 GW.

Emerging Startups

Fervo Energy (USA): Leading enhanced geothermal commercialization with over $1.16 billion raised. Their Cape Station project in Utah will deliver 100 MW by 2026 and has permits for 2 GW expansion.

Oxford PV (UK): First commercial perovskite tandem deployment in September 2024, shipping approximately 100 kW to a US utility-scale site with 24.5% efficiency on 72-cell panels. Licensing deal with Trinasolar for gigawatt-scale production.

Swift Solar (USA): Perovskite thin-film specialist partnered with American Tower Corporation, focusing on building-integrated and flexible solar applications.

Form Energy (USA): Iron-air battery developer targeting 100+ hour storage duration at one-tenth the cost of lithium-ion, addressing the renewable intermittency challenge.

Key Investors and Funders

Breakthrough Energy Ventures: Bill Gates-backed fund with $3.5 billion under management, providing $100 million preferred equity to Fervo Energy in 2025.

B Capital Group: Led Fervo's $462 million Series E in December 2025, signaling institutional conviction in next-generation geothermal.

BlackRock Infrastructure: Managing over $50 billion in renewable infrastructure assets, with significant exposure to European offshore wind and North American solar.

US Department of Energy Loan Programs Office: Providing catalytic capital including $25 million grants for EGS demonstrations and multi-billion dollar loan guarantees for utility-scale projects.

Sector-Specific KPI Table

Metric2024 Actual2025 ForecastTarget/BenchmarkSignal
Global renewable additions (GW)582650–7001,122 (COP28 target)Off-track
Solar module price ($/Wdc, global)0.100.09<0.08On-track
Offshore wind LCOE ($/MWh)75–8570–80<50 by 2030Delayed
Onshore wind LCOE ($/MWh)3432<25 by 2030On-track
Grid connection queue (GW)1,6501,800+Near-zeroWorsening
Perovskite tandem efficiency (%)34.634.8540+ by 2030On-track
EGS well output (MW/well)1012–1520+ commercialExceeding
Battery storage cost ($/kWh)192170<100 by 2030On-track

Examples

1. Fervo Energy's Cape Station Project

Fervo's Cape Station development in Beaver County, Utah represents the world's largest enhanced geothermal project. Phase I (100 MW) is fully funded and under construction for 2026 completion, with Phase II adding 400 MW by 2028. The project has secured power purchase agreements including 115 MW with NV Energy/Google for Nevada grid supply. Crucially, over 90% of on-site labor hours come from fossil fuel workers transitioning to clean energy, demonstrating the workforce pathway from oil and gas to geothermal. The project achieved a 70% reduction in drilling times year-over-year, validating technology transfer from unconventional oil production.

2. EnBW's He Dreiht Offshore Wind Farm

Germany's He Dreiht project, developed by EnBW, is installing 64 Vestas V236-15.0 MW turbines for 960 MW total capacity. The first turbine was installed in April 2025, with full commissioning expected by late 2026. Each turbine produces approximately 80 GWh annually—enough to power 20,000 European households—with a capacity factor exceeding 60%. The project demonstrates that Western manufacturers can deliver utility-scale offshore deployments despite Chinese competition, though at higher costs than Asian projects.

3. Oxford PV's Commercial Tandem Deployment

Oxford PV shipped its first commercial perovskite-silicon tandem panels in September 2024, marking the technology's transition from laboratory to utility-scale deployment. The initial 100 kW shipment to a US site achieved 24.5% efficiency on production panels—far exceeding conventional silicon modules. Their patent licensing agreement with Trinasolar creates a pathway to gigawatt-scale manufacturing without requiring Oxford PV to build its own factories, a capital-light commercialization strategy increasingly favored in climate tech.

Action Checklist

  • Evaluate grid interconnection timelines for any project in development pipeline; factor 24–36 month delays into financial models
  • Assess supply chain exposure to Chinese manufacturing; consider geographic diversification for projects requiring tariff-free access
  • Monitor perovskite stability data from Oxford PV and LONGi deployments—commercial-scale durability remains unproven beyond laboratory testing
  • Track Fervo Energy's Cape Station drilling costs as the benchmark for EGS commercial viability
  • Review offshore wind contract structures; many projects signed at pre-inflation pricing require renegotiation or cancellation
  • Consider battery storage co-location for new solar/wind projects to capture grid services revenue and improve dispatch flexibility
  • Investigate emerging market financing vehicles; IRENA's 1.6% low-cost debt share indicates massive unmet demand for concessional capital

FAQ

Q: Will perovskite solar cells achieve commercial-scale durability? A: Laboratory testing shows promising results, with flexible perovskite tandems retaining 91% efficiency after 5,000 bend cycles and achieving T80 lifetimes exceeding 2,000 hours under continuous illumination. However, real-world deployment data remains limited. Oxford PV's 2024 shipments represent the first commercial test; investors should expect 3–5 years of field data before bankability is established for large-scale financing.

Q: Can enhanced geothermal systems scale beyond demonstration projects? A: Fervo's 2024 breakthroughs suggest yes. Their achievement of 10+ MW per well and 70% drilling time reductions demonstrates that EGS can leverage existing oil and gas supply chains and workforce. The Cape Station project's 2 GW permitted capacity and power purchase agreements with Google indicate commercial demand exists. The key constraint is drilling rig availability and workforce training—both solvable with capital and time.

Q: Why is offshore wind struggling despite cost reductions in other technologies? A: Offshore wind faces unique challenges: longer project timelines (5–7 years), higher capital intensity ($4–5 billion per GW), complex permitting across multiple jurisdictions, and supply chain bottlenecks in specialized installation vessels and foundations. Rising interest rates hit capital-intensive projects disproportionately, while fixed-price contracts signed before 2022 inflation left developers exposed. The 27% forecast reduction reflects project cancellations and auction failures, not technology limitations.

Q: How should investors position for the China-West technology divergence? A: Chinese manufacturers lead in scale and cost, while Western companies lead in frontier technologies (perovskites, floating wind, EGS). Portfolio construction should consider: (1) Chinese exposure for near-term deployment volume, (2) Western exposure for technology optionality and markets with localization requirements, and (3) supply chain diversification for projects dependent on non-Chinese components. Trade policy remains the key uncertainty.

Q: What grid infrastructure investments offer the best risk-adjusted returns? A: HVDC transmission, grid-scale battery storage, and interconnection services are structurally undersupplied. The 1,650 GW grid connection queue creates both bottleneck and opportunity. Companies providing queue management, interconnection studies, and grid equipment manufacturing benefit from the mismatch between generation and transmission investment. Returns may be less volatile than generation assets given the regulated nature of transmission investment in most jurisdictions.

Sources

Topics

renewablessolarHVDCCfDDERpermittingbenchmark KPIs

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