Wall Street is falling out of love with fossil fuels, and showing more affection for renewables. Financing for oil, gas, and coal projects from the top six US banks fell to $73 billion in the first seven months of the year, down 25% from the same period last year, according to a Bloomberg analysis.
The data, analysts say, show that banks have an “it’s complicated” relationship with the energy transition: While all these same banks have dropped out of net zero groups in the past year, they are clearly souring on the prospective returns from fossil fuel projects. Private equity investors, meanwhile, are increasingly piling into renewables. Dedicated infrastructure funds raised $134 billion in the first six months of the year, more than they raised in all of 2024. More than one-third of that was for renewable-focused funds, according to an analysis by the investment firm Generate Capital.
“The fundamentals of the [renewable energy] market are just incredibly strong,” Logan Goldie-Scot, Generate’s vice president of research, told Semafor, because few other technologies are ready and able to meet the country’s surging power needs. But the economics of renewables will become more challenging as tax credits phase out, he said, so infrastructure investors feel they are under a ticking clock to get the best returns.