What makes start-ups in the energy sector successful

16.07.2025

Source: E & M powernews

Targeted political support, stable legal framework conditions, access to resources - a new study highlights challenges for start-ups.

Where would Germany be in the energy transition without start-ups? The University of Münster and the Fraunhofer Research Fab Battery Cells (FFB) have investigated the role that young companies play in the green transformation and the factors that determine their success. And how "investments can be specifically translated into measurable climate impact".

According to the researchers, they combed through more than 2,600 scientific publications. They have "condensed" 142 of these into a systematic overview of entrepreneurial activity in the start-up landscape.

Around 1.2 billion euros in venture capital flowed into German energy start-ups last year, the authors write. More than in any other field of technology. "Start-ups open up new fields of innovation and drive economic growth by questioning traditional paradigms and using modern technologies in a targeted manner," says FFB researcher Florian Degen. He sees the young companies in a "key role on the way to a more sustainable energy future."

Three categories of start-ups

The authors distinguish between three "forms of entrepreneurship": technology-oriented, community-based and rural start-ups. The first category includes start-ups that are working on AI-supported grid control or innovative solar systems. Community-based start-ups are located in the local energy transition. Rural start-ups are those that "improve access to affordable energy, particularly in structurally weak regions".

According to the authors, the innovative strength of the newcomers comes up against barriers to market entry. "Compared to other industries, the introduction and scaling of new technologies in the energy sector is associated with considerable technical and operational challenges," says Linda Brüss, a researcher at the Institute for Entrepreneurship at the University of Münster. "In particular, the integration into existing infrastructures or their replacement presents young companies with major challenges."

Leverage for founders

Her colleague David Bendig points to the regulatory requirements. "The energy industry is heavily regulated, and the legal framework differs considerably in some cases depending on the region or country," says the Director of the Münster-based institute.

The key finding of the study: "Start-ups in the field of renewable energies can make a decisive contribution to the energy transition if the political and economic framework conditions are right," it says. Entrepreneurial innovative strength alone is not enough. What is needed is "targeted political support, a stable legal framework and access to suitable resources".

According to the authors, founders should actively follow regulatory developments and get involved in political processes. Partnerships, for example with established companies or research institutions, and the adaptation of business models to local conditions are also important levers.

"Our analysis shows that start-ups can play a transformative role not only economically, but also socially," says Florian Degen. In order to leverage this potential, "mission-oriented funding programs, reliable signals for the future and an acceleration of central decision-making processes" are needed.

The study entitled "Entrepreneurship in the renewable energy sector: A systematic literature review of types, characteristics, and sustainability impacts" has been published in the journal Renewable and Sustainable Energy Reviews.

Author: Manfred Fischer