Climate tech funding is recovering, led by startups working on grid reliability, industrial heat, and energy storage. Investors say they are more selective than during the boom years, prioritizing companies with pilot customers and defensible manufacturing plans.

The shift is visible in deal terms. Founders report tighter milestones and more structured tranches. The upside is a healthier market that rewards execution over slogans.

For governments, the rebound is welcome: private capital can scale innovations that public programs help de-risk. The question is whether the funding wave reaches the regions and communities most in need of infrastructure upgrades.