The recent AI boom has set off a wave of new electricity use. Data centers now run nonstop to process language, images, and codes. This new technology and other shifts in electricity use could grow the country’s electricity demand by 25% by 2030 and require constant, round-the-clock power—something today’s renewable energy sources can’t reliably deliver. Emerging clean technologies could potentially do so, but they need time and capital to scale— creating an opportunity for investors who want to support decarbonization.

Electricity systems rely on two approaches to generate energy – burning fuel to release heat, or harnessing natural forces like wind, water, or the sun. Methods that do not involve burning fuel are considered clean because they do not directly emit carbon dioxide into the atmosphere, a major cause of climate change. Examples of clean energy include hydropower, solar power, geothermal power, and more.

24/7 Carbon-free Energy means that every kilowatt-hour of electricity usage is being met with a carbon-free electricity source, everywhere. 24/7 Carbon-free Energy can refer to both the achievement of this goal for a fully decarbonized electricity system as well as the approach to energy procurement, supply, and policy working to get there.

Regulators in the United States are easing their support for clean energy while utilities are turning to gas. In the U.S., data centers could drive nearly half of electricity demand growth by 2030. 64% of the incremental demand could be met by fossil fuels, threatening to erase decades of progress advancing the adoption of renewable energy. The recent One Big Beautiful Bill Act has repealed billions of dollars in clean energy incentives, which will “significantly affect the renewable energy industry and adversely affect the ability to develop and finance various renewable energy projects.” Support for renewable energy from investors is needed, both due to increased demand and because of decreased support from government.

Investors can approach clean energy opportunities with a range of expectations for returns, risk, and climate impact. Market-rate investors may target commercially mature technologies that offer competitive financial returns alongside measurable decarbonization. Impact-first investors, by contrast, may be willing to accept higher risk or lower returns—such as by backing systems that may take years to build when the potential climate payoff is large.

To deploy capital effectively, investors need to understand how each opportunity aligns with their financial and impact goals. Technologies vary in terms of their maturity, cost curve, and policy environment, and each solution has the potential for different levels of emissions reduction or environmental risk.

The following matrix maps solutions currently attracting capital across the clean energy landscape. It evaluates each solution along two dimensions:

• Financial attractiveness reflects how investable a solution is under current market conditions. Most technologies looking to achieve 24/7 Carbon-free Energy are hardware-heavy and capital-intensive. Financial attractiveness is assessed based on innovation maturity (including technical and commercial maturity) and regulatory standing.
• Impact potential reflects how much fossil fuel use the solution can reduce at system scale, while adjusting for downside risks, including environmental harm, rebound emissions, or systemic reliability concerns.

Positioning Clean Energy Solutions for Different Return-Impact Goals

For a market-rate investor, a solution like demand response may seem attractive. Virtual power plants (VPPs) are software platforms that coordinate how homes and businesses use electricity to ease pressure on the grid. VPPs were initially slow to scale because selling them to utilities required years of testing and contract negotiations, but worsening grid congestion and delayed infrastructure upgrades have accelerated adoption. Federal policies like FERC Order 2222 also made it easier for VPPs to sell their services into major energy markets—platforms that once only bought electricity from large power plants but now pay for tools that help shift or lower demand. Utilities in over 30 states are already rolling out or expanding VPP programs. Impact-wise, grid congestion is a key challenge to scaling clean energy. As of early 2025, over 2.6 terawatts of clean energy are waiting to be connected to the U.S. grid, more than double the total grid capacity. This means most projects sit idle for years after being built. VPPs can reduce demand spikes and free up grid capacity, potentially meeting up to 20% of U.S. peak electricity demand by 2030. VPPs aren’t ranked as having high catalytic impact potential, though, as they are already attracting commercial capital.

For an impact-first investor, a solution like enhanced geothermal may be compelling. The technology is early-stage, with only a few commercial-scale projects globally, but it is among the few emerging clean power sources that garner strong policy support. A new federal permitting process was implemented in 2025, reducing environmental review timelines from years to weeks for three Nevada geothermal projects. Enhanced geothermal may also have outsized impact, with the potential to supply ~12% of U.S. electricity demand by 2050, up from less than 1% today. But the technology still relies on impact-first capital to scale, as commercial investors remain cautious due to high drilling costs and long timelines typical of first-of-a-kind hardware projects.

Investors can back these 24/7 Clean Energy solutions by launching dedicated vehicles or allocating to existing climate funds. Traditionally, investors evaluate funds by assessing their strategy, team and track record, and market. These same criteria apply when evaluating an impact investment fund with a climate mandate.

• Investment Strategy: Climate funds, especially at the early and growth stages, often carry more technical, policy, and execution risk than traditional software or generalist funds. It’s important to check whether the strategy targets companies with validated technologies, proven offtake pathways, and scalable business models—and whether the fund can underwrite risks around permitting, integration timelines, and deployment challenges.
• Market: Climate tech CFOs cite regulation, trade policy, and supply chains as their top concerns. A disciplined fund evaluates portfolio exposure to these risks, prices them into its investments, and supports companies through policy shifts or procurement delays.
• Team and Track Record: Traditional venture benchmarks often reflect fast-scaling software models, where funds show early distributions to paid-in capital (DPI) through quick exits. But capital-intensive 24/7 Clean Energy strategies operate on slower timelines, with revenues tied to permitting, construction, and grid integration. For instance, a low DPI in year five may be normal for infrastructure-backed funds still under construction. Benchmarks tailored to climate tech are starting to emerge and are valuable for assessing track record.

Beyond financial discipline, impact funds should also demonstrate the ability to identify companies that fill decarbonization gaps, adopt best practices for impact management and measurement (IMM), and manage risks that could derail outcomes.

• Impact Strategy: As with managing financial performance, leading impact funds will set quantifiable decarbonization goals, model emissions at entry, and monitor and report on progress over time. To incentivize goal execution, funds can adopt a variety of tools, such as outcomes-based carry, third-party verification, per-dollar impact benchmarks, and public reporting. When facing a tradeoff between financial returns and impact, a disciplined approach is to set clear rules for prioritization. We have seen some funds establish a minimum emission reduction threshold per company and refuse to invest in businesses that fall short, even if the financial upside is strong.
• Impact Risk: Two common impact risks in this sector are around execution and evidence. Technologies like long-duration storage or grid software must pair with renewables and connect to the grid—steps that often face delays or fall through. It is also hard to validate impact potential of early-stage technologies before field testing. Effective funds identify these risks early and require mitigation plans—such as local engagement or water-efficient systems—and weigh investment decisions carefully.
• Impact Outcomes: Investors can look for funds that can demonstrate depth (e.g. annual tons of CO2 equivalent reduced per company), scale (e.g. reach across high-emitting sectors), and fund-level additionality. Top performers benchmark outcomes across peers and define exit pathways that embed long-term climate value.

For investors and advisors, 24/7 Carbon-free Energy is emerging as a key element within climate technology. Solutions across this space vary widely in maturity, capital intensity, and policy exposure—factors that directly shape risk, return, and adoption timelines. As government subsidies wane and market forces take the lead, understanding how to assess the impact and financial risks and rewards in these complex opportunities is becoming essential.

A clear understanding of this landscape allows advisors to better match client portfolios with strategies that balance financial performance and exposure to the energy transition. CapShift actively sources and evaluates investment opportunities across the 24/7 Clean Energy spectrum. We have has screened ~400 funds with a relevant theme and conducted diligence on 80+, all accessible via our Research Engine. Leverage CapShift’s tailored tools and resources to discover investments similar to those highlighted above. Contact us today to learn more or schedule a demo.

Financial attractiveness scoring:

• Score 1: Technology remains in pilot phase or early demonstrations. No contracted revenue, limited offtake agreements, heavy dependence on public funding, policy, or future cost declines to become investable. Current political environment lacks clear or sustained policy support.
• Score 2: Technology has demonstrated technical viability and initial commercial deployments. Projects remain small and exposed to policy and supply chain risks. Policy signals are mixed.
• Score 3: Technology is widely deployed with established offtake agreements, project structures, and financing pathways. Attracts infrastructure capital at market-rate returns with limited exposure to policy risk.

Impact potential scoring:

• Score 1: Contribute to emissions reduction or grid stability but do not displace fossil baseload. Shift peaks, balance supply, or lower some emissions. Example: short-duration lithium-ion battery storage that reduces peak demand but still depends on fossil backup elsewhere.
• Score 2: Cut fossil use in certain sectors or locations but limited by geography, permitting, or market fit. Example: conventional geothermal power, which delivers reliable, zero-carbon electricity but is constrained to resource-rich locations.
• Score 3: Capable of replacing fossil baseload and fundamentally reshaping the grid with continuous, dispatchable, zero-carbon power. Example: long-duration storage battery storage long-duration storage can shift excess renewable energy across days or weeks, smoothing multi-day gaps in wind or solar generation.
• Downgrade if major impact risks exist, such as environmental harm, rebound emissions, or new system-level risks. Example: fusion energy, while offering near-limitless clean power, faces material risks such as radioactive waste from neutron activation, safety concerns tied to plasma containment, and uncertain long-term costs for fuel sourcing.

Angela Wang is a Manager of Impact Investments at CapShift. She sits on the investment research team, where she sources, evaluates, and monitors investment opportunities across debt, equity, and recoverable grants. Before CapShift, Angela worked at International Finance Corporation, focused on conducting due diligence on emerging market investments and implementing impact management frameworks. Her prior experience includes management consulting and venture capital investment.