Industry Insight Report: Electrical Contractors Q3-2025
Industry Insight Report: Electrical Contractors Q3-2025
The electrical contracting industry continues to show strength through the latter half of 2025, bolstered by ongoing growth in renewable energy capacity and steady employment trends. At Lion Business Advisors, we’ve seen continued buyer demand for well-structured firms in Texas as energy transition projects, infrastructure upgrades, and AI-enabled service models gain traction. Businesses with recurring maintenance revenue and skilled management teams continue to command premium valuations.
Major Industry Development
Renewable energy remains the major growth driver across the electrical contracting sector. According to Vertical IQ data, renewable sources accounted for 91% of the 15 gigawatts of new electricity generation capacity added in the first five months of 2025. Solar led the way with 11.5 GW, followed by wind at 2.3 GW. Despite policy headwinds, including the Trump administration’s rollback of renewable energy tax credits, federal data projects that 84% of future capacity additions by 2028 will still come from solar and wind. For contractors, this shift underscores the long-term opportunity in clean energy installations, battery storage, and grid modernization work, sectors that continue to attract both strategic and financial buyers seeking sustainable growth.
Employment and Wage Trends
Employment across electrical contractors and wiring installation firms rose 1.1% year-over-year as of July 2025, with total employment expanding 34.4% over the past decade, far outpacing overall private sector growth of 13%. Over the past three years, employment grew 8.5%, highlighting strong labor demand despite ongoing workforce shortages. Average hourly wages reached $39.81 in July, a 5.5% year-over-year increase. Over the past three years, wages rose 17.9%, outpacing private sector growth of 13.4%. For buyers, sustained wage growth reinforces the importance of retention systems, apprenticeship programs, and automation tools that enhance productivity and margins.
Industry Forecast
The US electrical contracting industry is forecast to grow at a 5.07% compounded annual rate from 2025 to 2029, outpacing the broader economy. Texas continues to be one of the most active regions for both new construction and renewable infrastructure projects, driving consistent demand for qualified contractors. With major public and private sector investment in energy transition projects, regional firms remain well-positioned for long-term expansion.
M&A Market Outlook
The current M&A environment for electrical contractors remains favorable for sellers, though disciplined buyers are increasingly focused on operational efficiency, backlog strength, and leadership depth. Private equity and consolidators in the home services and infrastructure sectors continue to pursue platform acquisitions, particularly those with multi-crew capacity, diversified service lines, and strong recurring relationships. Texas-based firms benefit from both population-driven growth and state-level infrastructure spending, making the region a consistent focal point for strategic expansion. Owners who have invested in process standardization and management succession are well-positioned to capitalize on these market conditions.
Looking ahead to 2026, the industry’s combination of renewable energy momentum and solid fundamentals positions qualified electrical contractors for continued growth and attractive exit opportunities. For business owners considering a sale or strategic transition, now is an excellent time to begin formal preparation and valuation discussions.
Lion Business Advisors’ quarterly industry insights incorporate data and trends sourced from internal deal flow and buyer activity, Vertical IQ, and market comparables from platforms such as Axial and BVR (Business Valuation Resources).
Industry Insight Report: Electrical Contractors Q3-2025
The electrical contracting industry continues to show strength through the latter half of 2025, bolstered by ongoing growth in renewable energy capacity and steady employment trends. At Lion Business Advisors, we’ve seen continued buyer demand for well-structured firms in Texas as energy transition projects, infrastructure upgrades, and AI-enabled service models gain traction. Businesses with recurring maintenance revenue and skilled management teams continue to command premium valuations.
Major Industry Development
Renewable energy remains the major growth driver across the electrical contracting sector. According to Vertical IQ data, renewable sources accounted for 91% of the 15 gigawatts of new electricity generation capacity added in the first five months of 2025. Solar led the way with 11.5 GW, followed by wind at 2.3 GW. Despite policy headwinds, including the Trump administration’s rollback of renewable energy tax credits, federal data projects that 84% of future capacity additions by 2028 will still come from solar and wind. For contractors, this shift underscores the long-term opportunity in clean energy installations, battery storage, and grid modernization work, sectors that continue to attract both strategic and financial buyers seeking sustainable growth.
Employment and Wage Trends
Employment across electrical contractors and wiring installation firms rose 1.1% year-over-year as of July 2025, with total employment expanding 34.4% over the past decade, far outpacing overall private sector growth of 13%. Over the past three years, employment grew 8.5%, highlighting strong labor demand despite ongoing workforce shortages. Average hourly wages reached $39.81 in July, a 5.5% year-over-year increase. Over the past three years, wages rose 17.9%, outpacing private sector growth of 13.4%. For buyers, sustained wage growth reinforces the importance of retention systems, apprenticeship programs, and automation tools that enhance productivity and margins.
Industry Forecast
The US electrical contracting industry is forecast to grow at a 5.07% compounded annual rate from 2025 to 2029, outpacing the broader economy. Texas continues to be one of the most active regions for both new construction and renewable infrastructure projects, driving consistent demand for qualified contractors. With major public and private sector investment in energy transition projects, regional firms remain well-positioned for long-term expansion.
M&A Market Outlook
The current M&A environment for electrical contractors remains favorable for sellers, though disciplined buyers are increasingly focused on operational efficiency, backlog strength, and leadership depth. Private equity and consolidators in the home services and infrastructure sectors continue to pursue platform acquisitions, particularly those with multi-crew capacity, diversified service lines, and strong recurring relationships. Texas-based firms benefit from both population-driven growth and state-level infrastructure spending, making the region a consistent focal point for strategic expansion. Owners who have invested in process standardization and management succession are well-positioned to capitalize on these market conditions.
Looking ahead to 2026, the industry’s combination of renewable energy momentum and solid fundamentals positions qualified electrical contractors for continued growth and attractive exit opportunities. For business owners considering a sale or strategic transition, now is an excellent time to begin formal preparation and valuation discussions.
Thinking of selling your electrical contracting business?
Get Your Sellability Score Today to see where your company stands.
Categories
Advisors