The clean-tech landscape is always evolving, shaped by market forces, innovation, and policy changes. Despite the uncertainties of the past year, we’re putting forth 10 daring (yet optimistic) predictions for 2025. See if you agree!

1.  US Lithium prices will fall below $8,000/MT.

There was much hand-wringing when lithium carbonate hit $68,000/MT in 2022 and seemingly imperiled the popularity of EVs.  As usual, people ignored that high prices bring forward more supply.  In 2023, prices were down to $46,000/MT on average.  By the end of 2024, the price dipped to $9,540/MT. The addition of more supply and softening of demand due to the change in US policy toward subsidizing EVs will drive prices below $8,000/MT in the coming year, getting close to the $6,000/MT paid in 2017.  (Source:  Statista.com)

2.  Battery prices will dip below $90/kWh 

Lithium-ion battery pack prices for EVs have been a bellwether indicator of the momentum toward replacing ICE vehicles.  These prices have been on a steep 92% decline since 2010 when they stood at $1,439/kWh.  Their costs have dropped every time the number of batteries deployed in the real world has doubled. With the upsurge in batteries used in stationary storage, this learning curve effect has been amplified.  According to Bloomberg NEF, the average cost in 2024 was $115/kWh, with a dip under $100/kWh by year end.  With the drop in lithium prices and the introduction of non-lithium batteries, we see this curve continuing to decline.

Source:  BloombergNEF 2024

3.  The nuclear-AI mega-data center connection will fade

Last year saw a burst in enthusiasm by AI data center developers to invest in nuclear power as a way to satisfy their voracious appetite for clean power.  But they will soon discover that contrary to their current opinion, nuclear options are not available in time to meet their needs.  Nuclear fission plants have always involved more delays and costs than expected, which will still be true even for restarting idle nuclear plants. Other options will gain momentum.  Google has chosen to go with hydrogen and fuel cells.  Solar/wind plus storage is still in play.  Now, the oil majors want to put forward a carbon-neutral solution using natural gas and cogeneration plants that have carbon capture and sequestration as part of the plan.  Making data centers more efficient with a new generation of less power-hungry chips or more precise demand management will also figure into the solution.  The one to watch will be the restart Unit 1 of the Three Mile Island plant, owned by Constellation Energy.  It seems a simple proposition on the surface, but we predict many surprises will chill enthusiasm for proceeding with it.  

4.  Carbon pricing in North America will remain very volatile

The total amount of carbon offsets traded is relatively low and one of the reasons seems to be that their prices swing too widely over the year.  It creates risks for buyers.  Many analysts see carbon markets stabilizing in 2025.  We do not. The turmoil created by the US elections will continue to swing carbon prices by a factor of 2 from low to high.  We would love to be wrong about this, but our heads say it won’t happen.  We do think, however, that the actions by CARB to tighten restrictions on emissions and on the allowable amount of fossil carbon in fuels will lift both prices.

 5.  30% of new vehicle sales will be ZEV.

In 2023 we went from 20% to 25%, but in the third quarter of 2024, we were only at 26.4%. As ZEVs become more and more standardized and chargers become more widely available, we’re seeing these vehicles’ adoption rapidly. With the introduction of options across all price ranges, we believe that commuters looking for a new car will inevitably give in to the increased efficiency of ZEVs. We also believe that the incentives for those leasing EVs will remain, despite the negative attitudes from the new administration.

6.  The cost of building solar will be lower to 55% of its cost per MW from 2014. 

According to SEIA, the cost in 2024 was 63% of what it was in 2014. With the aid of intelligent design software to cut installation costs, we’ll see explosive growth in solar technologies and ease/cost of manufacturing, particularly in residential solar and small-scale installations.

7.  We’ll have only 225,000 out of the 250,000 chargers that Governor Newsom planned on.

As of August 2024, California had installed over 150,000 electric vehicle (EV) chargers statewide, including 137,648 Level 2 chargers and 14,708 fast chargers. This was a huge jump compared to the 105,012 of 2023.  In December 2024, the California Energy Commission (CEC) approved a $1.4 billion investment plan to accelerate progress on the state’s EV charging and hydrogen refueling goals. This plan aims to deploy infrastructure for light, medium, and heavy-duty zero-emission vehicles across California. Still, we’re not confident that the available labor will allow them to double annual charger installations.

8.  Global Carbon Trading will be announced in 2025, but not started.

The mechanisms for a global carbon market have been agreed upon.  At COP29 countries agreed on how carbon markets will operate under the Paris Agreement, making country-to-country trading of carbon credits possible. However, this doesn’t mean anything will happen right away. The agreement is there, but the technical work is still needed. A global carbon trading market won’t happen in 2025. Expect big carbon trading announcements late in 2025 after the technicals are hammered out.  https://www.whitecase.com/insight-alert/cop-29-global-carbon-market-making

9.  SMUD will announce a significant geothermal expansion

Geothermal is now getting renewed interest as a source of 24/7 carbon-free power.  New technologies are on the market to develop new or expand existing geothermal plants.  Fervo Energy has been in the news for its new use of fracking and water injection to expand the areas that could exploit shallow hot spots that do not generate steam.  More traction is being gained as well with successful demo projects to validate their technology in the past year.   Our candidate for doing something significant is SMUD.   They already use geothermal in The Geysers for >14% of their power supply and seem able to move faster than their colleagues.  The California Public Utilities Commission adopted a procurement strategy that includes adding up to 1 GW of geothermal.  However, geothermal projects in California have an additional obstacle, overcoming opposition to drilling projects that involve techniques similar to those in oil and gas development that have generated restrictions on their use.  But look for SMUD as the first to move to announce an expansion of its geothermal capacity in 2025.

10.  Offshore wind will pick up worldwide, but adoption will falter in California.

Around the world offshore wind is being pursued, because it allows for bigger turbines and has consistent wind, meaning more generation and higher capacity factors. However, offshore wind will make little progress in California in the next few years.   California’s difficult ocean floor and inevitable environmental reviews require significant innovation and care.  Without the continued push from the federal government, the big plans for 25 GW of floating offshore systems will wilt.  Much of the state push for deep offshore wind farms was based on the premise that sitting on land with the equivalent capacity in solar plus storage would be too difficult.  However, we expect that premise to be challenged.  Solar + plus storage is too fast and low priced and will get even faster and lower priced. The primary thing slowing down the slowing down of renewables on the grid is the grid interconnection, which FERC, CAISO, and WECC are working on accelerating. The same grid problem plagues offshore wind.  It’s a race to see who has the best options and will think Big Wind will falter.   But small wind, more appropriate in sites nearer shore, and unit sizes of 10 MW or less may find a way to thread the needle and get a foothold. 

What’s Your Take?
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Our 2024 Predictions Score: 6.5 Out of 11—See How We Fared!

Our bold predictions for 2024 were a little too bold–but we try to be provocative.  Still, we got 5 of 11 right, 3 partially right, and 3 dead wrong.  The biggest surprise was how much investment landed in the region for making captured carbon dioxide into fuels and chemicals.  We were off by a factor of at least 4.  The biggest miss was about rooftop solar costs.  They went up not down. Find out more as we score ourselves below. 

1. Higher PG&E Rates Will Open New Opportunities For Rooftop Solar to Rebound

Somewhat correct.  The boom has mostly been in adding storage systems on new installations and retrofitting existing ones.  But the overall rate of installations of rooftop solar currently are low.  There was a burst of activity as customers able to have the old NEM 2.0 rates grandfathered rushed to get equipment installed.  There were some bright spots. Through California’s 2024 legislative activity, solar customers are indeed gaining new incentives for energy storage solutions. The CPUC’s expansions to community solar and new energy storage initiatives—like the Disadvantaged Community Green Tariff (DAC-GT)—support both new and existing solar users, especially those in underserved areas. This allows low-income households to offset their energy costs while gaining access to solar-generated energy without the need for individual installations.
Additionally, Assembly Bill 1373 enhances the landscape for existing solar customers by promoting large-scale storage options, allowing households with solar systems to store excess daytime energy more effectively. However, none of these reversed the downward trend. 

2.  Texas Will Make New Solar Installations Twice As Fast As California

Correct.  Not only has California slipped behind Texas, it appears that, once the full-year data are published, California will also rank behind Florida.  

Source:  Solar Energy Industries Association, Sept. 9, 2024

Texas has also overtaken California in 2024 as the leading state for utility-scale solar energy, adding a significant 3,293 MW of new solar capacity by mid-year. Texas now leads the U.S. with 21,932 MW of utility-scale solar, capturing about 20% of the country’s total solar capacity. This shift aligns with previous predictions that Texas would rapidly expand in this area, as large-scale installations in California face limitations, particularly due to curtailments during times of peak solar generation.  California remains focused on integrating more storage to handle excess generation, which could help it regain momentum in utility-scale solar growth down the line

3. The Installed Costs of Residential Solar Will Decline Once Again

Wrong.  It went up instead.  The cost of residential solar has jumped to the highest it’s been in 8 years, sitting at $5.18, just a cent below the $5.19 of 2016. California’s shifting policies, particularly with the NEM 3.0 adjustment, have dampened demand, contributing to higher prices as solar installers navigate regulatory changes and costlier installation logistics. More than 22,000 solar jobs have been lost since NEM 3.0 was introduced, which is 22% of all solar jobs in California.

4. Nationwide There Will Be Over $250 Million in Investment in Carbon Dioxide Utilization Projects, Creating Significant Amounts of Renewable Fuels And Chemicals

Correct.  There has been a notable increase in funding for carbon dioxide utilization projects in the U.S. aimed at transforming CO₂ emissions into renewable fuels and chemicals, driven by both public and private sector interest. The Department of Energy’s Office of Clean Energy Demonstrations (OCED) recently announced a substantial $1.3 billion funding initiative to support transformational projects that aim to reduce emissions significantly. This funding alone is far above our expectations, but there are smaller-scale opportunities worth highlighting. For example, the DOE has earmarked $41 million for projects specifically focused on renewable-to-liquids (RtL) technology, which leverages renewable energy, water, and CO₂ to produce liquid fuels. This approach aligns with similar efforts made by companies like Infinium, a Sacramento-headquartered venture that is focused on producing sustainable aviation fuel (SAF) from captured CO₂. SAF is particularly advantageous for decarbonizing the aviation industry, which has limited alternatives to conventional fuels.
The National Academies have also highlighted the potential for CO₂ to serve as a raw material for sustainable chemical manufacturing, emphasizing the need to address research gaps in efficiency and scalability for these technologies to become commercially viable.

5.  Two More High-Power EV Charging Stations Will Begin To Be Built in The Region With Capacities Over 10 MW

Half-right.  The Sacramento County WattEV Innovative Freight Terminal (SWIFT), located near I-5 and south of the Sacramento International Airport had already been announced.  Voltera this year announced plans to develop two new charging locations in California, specifically designed to meet the needs of zero-emission vehicle fleets. One of those is in West Sacramento.  While other sites are under development, nothing more was announced in 2024.  So, one out of two.  Not too bad.

6.  New Investments in Clean Tech Companies in The Region Will Top $150 Million

Correct, but underestimated.  We undershot this one, thanks to one of Sacramento’s most successful new companies, Infinium. In 2024, the Greater Sacramento Valley has indeed seen clean tech investments continue to surge, with aggregate funding now estimated at well over $1.5 billion, driven by a combination of substantial private and public sector support. A significant portion of the region’s investment momentum comes from Infinium’s $1.1 billion funding deal with Brookfield Asset Management. This investment is intended to accelerate Infinium’s development of eFuels, synthetic fuels produced from captured waste carbon, and clean hydrogen, which is critical for supporting California’s clean fuel transition goals.

In addition, SMUD received a $10 million state grant to support a long-duration battery storage project in partnership with ESS Tech, Inc. And CalSEED awarded $150,000 grants to seven companies in the Sacramento Valley, including three in Davis, aimed at advancing clean energy innovations. 

7.  A Third Long-Duration Energy Storage Project Will Be Launched in Northern California

Bingo.  Hydrostor is developing the Willow Rock Energy Storage Center in Kern County, a 500 MW Advanced Compressed Air Energy Storage (A-CAES) facility. Set to provide 4,000 MWh of storage, this facility is designed for eight hours of energy output, making it ideal for grid support during periods of low renewable generation. Hydrostor’s system utilizes underground caverns to store compressed air, which is then released to generate electricity, offering a reliable alternative to traditional battery storage.

8.  The Value Of an Offset Ton of Carbon Dioxide in California Markets Will Increase Slowly

Half-right.  The price of carbon allowances in the cap and trade program has increased modestly, while in the Low Carbon Fuel Standard credits market, the price has been declining. However, in both markets there has been volatility, more so in the LCFS case.  

9.  It Will Be The Year of the USED Electric Car

Correct!  But…In 2024, the used electric vehicle (EV) market experienced significant growth, driven by the increasing turnover of fleet vehicles and a cumulative total of over 4.7 million plug-in hybrid and fully electric cars sold in the U.S. This surge has made pre-owned EVs more accessible to a broader range of consumers.  The influx of used EVs has led to a notable decrease in prices, making them more attractive to budget-conscious buyers. For instance, the average price of a used EV in August 2024 was $26,839, which is 11.4% less than comparable gas-powered cars and 9.8% less than hybrids. This price drop is attributed to an oversupply of new cars, a slowdown in EV sales, and pricing incentives on aging inventory.

Despite the growing appeal of used EVs, maintenance and repair remain significant challenges. The specialized nature of EV components requires technicians with specific training and expertise. However, there is a limited availability of such technicians, leading to potential difficulties in servicing these vehicles.

10.  Commitments to the First Small (less than 20 MW) Offshore Wind Deployments Will Be Made for a Site Off the North Coast

Didn’t happen.  RWE from Germany is the big player in the North Coast, planning to install 1600 MW of wind turbines on huge floating platforms 20 miles offshore for its Canopy Project, but not until the middle of the next decade.  We still believe something smaller will go faster, but with the antipathy toward offshore wind in the new Administration, that may be true only if it were in State waters. 

11. The EV Premium Will Disappear

Wrong.  The anticipated decline in electric vehicle (EV) prices has not continued in 2024. Instead, the gap between EV prices and the overall new car market has widened compared to recent years. In 2024, the average price paid for a new EV is 16% higher than the average for all new vehicles. This marks a reversal from 2023, when EV prices were closer to parity, averaging only 8% more than the overall market. In 2022, EV prices were around 15% higher than the average ICE car.  One part of the reason for the trend is that despite the introduction of affordable EVs, most new introductions to the space have been very expensive, fully-loaded models which is dramatically raising the “average price paid” for an EV.  At the same time, BYD has introduced a small car with a modest range that sells for $13,000 in mainland China.

Key Takeaways

• Carbon Utilization Projects: Surpassed funding expectations and proved a bright spot in cleantech innovation.
• Solar Trends: Storage retrofits and community programs are gaining traction but haven’t reversed the rooftop solar decline.
• EV Market: Used EV sales are booming, but affordability challenges persist in the new car market.

2024 taught us that even in a volatile industry, cleantech resilience and innovation continue to push boundaries. Stay tuned for our 2025 predictions—what surprises will the future hold?

On November 21, CleanStart hosted an engaging discussion with Dr. Mark Trexler, CEO of Climatographers and a leading analyst on climate change policy. Dr. Trexler shared critical insights into the complexities of carbon markets in the U.S. and abroad, shedding light on the challenges and opportunities in the fight against climate change.

Why Carbon Pricing Matters

Dr. Trexler emphasized that the future of carbon reduction hinges on two key factors:

1. The price of carbon allowances or credits
2. The stability of these prices over time

Unlike Europe, where carbon allowance prices have remained relatively steady at approximately $75 per ton, the U.S. lacks a unified national market. Instead, state-led programs dominate the landscape, particularly on the West Coast. These markets, while pioneering, have shown significant volatility.

A Snapshot of U.S. Carbon Markets

• California’s Low Carbon Fuel Standard (LCFS): Prices peaked at over $221 per ton in June 2022 but plummeted to under $45 in May 2024. They have since rebounded to $70 per ton.
• California’s Cap-and-Trade Program: After a long stagnation at $15 per ton, prices surged to $45 in 2021 but have since settled at $30 per ton.
• Washington State’s Carbon Market: Initially fluctuating around $30 per ton, prices climbed back above $50 following the November election, which rejected an initiative to repeal the program.

What Stable Pricing Means for Progress

Dr. Trexler stressed that carbon pricing needs to strike a delicate balance:

• Prices should remain between $50 and $100 per ton to encourage investment without triggering a backlash.
• Stability is crucial to reduce risks for industries making long-term investments in emission-reduction strategies. What needs to emerge is a deep forward market that provides prices for allowances ten or more years into the future.

California’s Air Resources Board is taking steps to tighten carbon emission restrictions, which could drive up allowance prices. However, without a robust forward market to ensure price stability, uncertainty may continue to hinder progress.

A Global Perspective

While U.S. carbon markets struggle with volatility, European carbon allowances offer a more stable model. This steadiness has helped industries in Europe adopt cleaner practices with greater confidence. Could the U.S. learn from this approach?

Looking Ahead

With four decades of experience, Dr. Trexler brings a wealth of knowledge to the discussion. He voiced concerns about potential challenges ahead, including policy shifts under new administrations and legal battles over state-led carbon programs. Despite these uncertainties, he remains optimistic about the role of carbon pricing in driving climate action.

Catch the Full Discussion

Want to dive deeper into Dr. Trexler’s insights? Watch the full recording of the event here. You’ll hear about his thoughts on global trends, policy risks, and actionable strategies for the future of carbon markets.

At our November 7 MeetUp, we reviewed the state of the race for alternate net zero carbon fuels for the transportation market, the largest source of harmful carbon dioxide emissions.  Consequently, the market for alternative fuels is huge, measured in the billions of gallons per day.  

We had three speakers:  Dr. Dennis Schuetzle, CTO of Infinium, Deepak Aswani Supervising Principal Engineer, Research & Development from SMUD, and Elaine O’Byrne, Director of Operations from Fuse.  We discussed 4 paths forward.  Three depend on lowering the price of green hydrogen.  The fourth depends on getting better fuel-producing energy crops.  None of the paths are yielding fuels at a price equivalent to those derived from petroleum.   However, there are some bright spots.

Using hydrogen directly is by no means the simplest path, according to Dr. Schuetzle.  It would require a massive investment in new infrastructure and conversion equipment (like engines and fuel cells) to use this elusive fuel.  He advocated hooking the hydrogen to another atom, in his case a carbon atom coming from captured carbon dioxide.  Deepak said SMUD is looking at that plus hooking hydrogen to a nitrogen molecule to create ammonia as the energy carrier.  The question is what happens to the nitrogen at the point of use.  If the ammonia goes directly into an engine or turbine, it could result in production of a lot of nitrogen oxides, one of the key components in the reaction to create smog and a harmful chemical on its own affecting respiration.  And ammonia is itself a toxic chemical that need to be handled with care.  SMUD is also looking at “renewable natural gas”—basically methane from digesters, gasifiers, or landfills.  Liquid fuels from organic sources like plant oils are clearly already in the commercial market as biodiesel, but with doubts about the total amount that can be supplied being able to shrink the use of petroleum-based fuels much.  There is more hope the synthetic fuels could achieve this goal.

In terms of commercial success, ammonia and the “E-fuels” like those from Infinium are making some progress.  Dr. Schuetzle offered these milestones:  With subsidies and incentives, Infinium can sell its clean diesel in California for $6-7 per gallon, barely profitable, but in Europe where subsidies for Sustainable Aviation Fuels (or SAF) are more generous, the sales price is equivalent to $22 per gallon.  Unsurprisingly, Infinium has targeted Europe for some of its biggest commercial projects with plans underway for large plants (on the order of 50,000 barrels per day) in France and Norway.  Infinium has already scaled itself up from a 50 bpd plant to 500 and now shortly to 5,000 bpd.  In addition, Infinium has found that better markets are also available if it orients its facilities to make naphtha or waxes.  Still Dr. Schuetzle does not see SAF in the aggregate from multiple suppliers as satisfying more than about 2% of the market in the next decade.  He does see hope that by adjusting its product stream to favor the high-margin goods, Infinium could be profitable.  It might be one of the first to do so.

Elaine talked about the incentives offered in California through the Low Carbon Fuel Standard.  While the LCFS credits have drifted up to $200 per ton of carbon removed, they have now settled back down to around $70.  This is not a level which encourages much production of these more abundant low and zero carbon fuels.  However, the level of the credit is a function of where the ARB sets the target for the carbon content of fuels.  If, as seems likely from its recent proposed rulemaking, the allowable amount of carbon in fuels is lowered, the credit price will increase.  A higher credit price may entice more low-carbon fuel producers into the market.

So, while the race is underway, it will be a marathon.  It will create business opportunities for those who can master how to maximize the use of the credits and those who find better catalysts to lower production costs.