Energy Analytics

Do Renewable Asset M&A Multiples Point to a Bubble?

byEnverus

The M&A market for renewables assets gained momentum over the past decade (Figure 1), demonstrating increased interest that we attribute to cost declines, stricter government policy and growing societal support. Recent high-water mark deal multiples of $8-$10 million/megawatt (MW) observed in the North Sea raise the question of whether renewable asset valuations are floating in a bubble.

Improvements in asset performance and declining costs in the renewables space are the same characteristics that drove a “hype curve” in shale plays like the Delaware Basin in Texas and New Mexico, which at its peak saw a fivefold appreciation in land value as buyers grew comfortable with increasingly aggressive M&A multiples. But our analysis of ~$130 billion of solar and wind transactions since 2010 revealed a surprisingly stable average multiple of ~$3.5 million/MW. Since most transactions occurred during or after construction once the distribution of future cash flows was established, little room was left  for asset value speculation.

While the North Sea’s $8-$10 million/MW benchmark may seem exuberant at first, we believe it is justifiable based on certain legacy programs that set high prices to encourage the development of power generation projects from renewable energy sources. Our analysis of the levelized cost of energy, which measures the cost to generate power over a plant’s lifetime, for U.K. wind farms alongside policy-set pricing showed $100/megawatt hour spreads through the back half of the last decade – bringing multiples of $10 million/MW into the money. However, this price-setting mechanism has since been discontinued in favor of a competitive bidding process, which we believe will eliminate the spread and cause M&A multiples in the region to converge towards $3 million/MW – on par with industry average. Click here to learn more about Enverus’ Intelligence solutions.

FIGURE 1 | Renewable Asset Generation Deals Over the Past Decade

Picture of Enverus

Enverus

Energy’s most trusted SaaS platform — creating intelligent connections that uncover insights and opportunities to deliver extraordinary outcomes.

Subscribe to the Enverus Blog

A weekly update on the latest “no-fluff” insight and analysis of the energy industry.

Related Content

bA
Energy Transition
ByBrynna Foley

Publicly traded independent power producers (IPPs) are poised for a significant shift as renewable energy continues to reshape the generation mix. Enverus Intelligence® Research’s latest report explores how evolving generation and price forecasts will impact IPP profitability. The retirement of...

Enverus Blog
Energy Transition
ByCarson Kearl, Enverus Intelligence® Research (EIR) Contributor

Enverus Intelligence® Research (EIR) and many others have published at length on the coming wave of load growth that starkly contrasts more than a decade of stagnation.

Enverus Intelligence® Research Press Release - Winning in the West: Renewed opportunities are resurfacing in the DJ and PRB’s Niobrara
Energy Analytics Financial Services
ByEnverus

In a landmark move within the Canadian energy sector, Whitecap Resources Inc. (WCP) and Veren Inc. (VRN) have announced a near merger of equals. This strategic combination, with a purchase price of C$8.6 billion (US$5.9 billion) for Veren inclusive of...

Enverus Intelligence® Research Press Release - OPEC+ cuts and Trump tariffs force price downgrade
Analyst Takes Trading and Risk
ByAl Salazar, Enverus Intelligence® Research (EIR) Contributor

The following blog is distilled from an interview on CBC’s “The Eyeopener,” hosted by Loren McGinnis who interviewed Enverus Intelligence® Research’s (EIR) very own Al Salazar. Click here to listen to the full radio segment.  Consequences for U.S. Shale and...

Enverus press release - Renewing Alberta’s path for renewables
Energy Transition
ByAdam Robinson, Enverus Intelligence® | Research (EIR) Contributor

Since 2020, the demand for Power Purchase Agreements (PPAs) has surged, driven by tax incentives, corporate clean energy goals, and increasing power needs.

Enverus Press Release - Alternative fuels M&A focus turns from policy boosts to business resilience
Power and Renewables
ByKatherine Paton-Ilse

Most projects that enter the interconnection queues never get built. The queues are growing increasingly crowded, and backlogs continue to persist across multiple ISOs.

energy-transition-research
Energy Transition
ByThomas Mulvihill

Enverus Intelligence® Research (EIR) has updated its long-term load forecast model, predicting a 30% increase in total U.S. power demand by 2050, down from the previous projection of 39%.

Enverus_Press_Release_EV_Regional_Volatility_Thumbnail
Power and Renewables
ByNatalia Opie Davila, Customer Success Lead at RatedPower

Solar panels can be coupled or linked to a battery either through alternating current (AC) coupling or direct current (DC) coupling. AC current flows rapidly on electricity grids both forward and backward. DC current on the other hand, flows only in...

Enverus/RatedPower Press Release - RatedPower publishes 2025 Global Renewable Trends Report examining the green landscape
Power and Renewables
ByNatalia Opie Davila, Customer Success Lead at RatedPower

Solar irradiance, the power of solar radiation measured in W/m2 — is an essential metric when designing a PV system. One of the most important factors to consider when designing a solar photovoltaic (PV) system is the level of solar...

Let’s get started!

We’ll follow up right away to show you a quick product tour.

Let’s get started!

We’ll follow up right away to show you a quick product tour.

Sign up for our Blog

Register Today

Sign Up

Power Your Insights

Connect with an Expert

Access Product Tour

Speak to an Expert