A data-driven analysis of Green Energy companies in Europe: market dynamics, financing sources, and key profitability drivers

In a world where all eyes are pointed in the direction of sustainability and the environment, Green Energy firms are the main sector that will drive the change toward clean technology. This thesis has the objective to understand the evolution of this sector and what are the main challenges it will have to face. This research stems from a European project, financed by European Investment Bank (EIB)’s University Research Sponsorship (EIBURS) program, conducted by Prof. Elisa Ughetto (Politecnico di Torino), Prof. Annalisa Croce (Politecnico di Milano) and Prof. Laura Toschi (Università degli Studi di Bologna). The project focused on mapping Cleantech companies in Europe. As part of this project, a comprehensive database of Cleantech firms was developed using advanced machine learning techniques. This thesis builds upon that base, leveraging the dataset created to analyze the market dynamics, financing sources, and profitability drivers of the Green Energy sector in Europe, a subgroup of Cleantech companies. This study begins by describing sustainability nowadays, the regulatory landscape in the European countries, Cleantech and Green Energy companies and their role in the transition to sustainable energy. A descriptive statistical analysis (Chapter 3) was then conducted on the companies in the database, segmenting them by ecosystem role, technological specialization, geographical distribution, and founding year. Additionally, the analysis explored patent activity and financial KPIs, offering insights into the innovation capacity and financial stability of these firms. In Chapter 4, the research focuses on funding sources, with the aim of understanding whether being VC-backed is positive or challenging. Companies were distinguished between backed by venture capital (VC) or business angels (BA) and those relying on alternative financial mechanisms, highlighting the key differences in terms of financial performance, innovation intensity, and market positioning. Finally, Chapter 5 investigates the key factors influencing profitability, applying statistical methodologies to assess their impact. The analysis evaluates several variables such as geographical location, funding method, and company size, providing a weighted assessment of their influence. The results of the analysis reveal several key findings. The majority of green energy companies in the dataset are concentrated in Germany, Italy, France, and Spain, reflecting the presence of national policies and incentives toward green economy. The analysis also highlights that companies backed by venture capital tend to have higher innovation levels, as measured by patent activity, compared to non-VC-backed firms. Furthermore, company size, geographical location, and access to funding are identified as the key factors influencing profitability, with larger firms demonstrating higher financial stability and performance. By offering a data-driven perspective on the financial and operational characteristics of green energy firms, this research aims to provide valuable insights for the industry stakeholders, contributing to the development of a more sustainable and economically reliable energy sector in Europe.