Chart: Trump’s Impact on Clean-Energy Manufacturing

During the last year, the volume of scrapped clean technology production projects almost equaled the value of new launches, with firms calling off projects worth $22.7 billion, while initiating new ones valued at $24.1 billion.

This signifies a drastic shift in the industry. The Inflation Reduction Act, a policy of the Biden era, had led to more than $100 billion in commitments to clean technology manufacturing through incentives for both manufacturers and consumers, such as those seeking to purchase an electric vehicle or energy developers overseeing the construction of a solar mega project. This resulted in a surge in cleantech manufacturing projects, leading to thousands of job creations and an exponential increase in overall manufacturing investment. The majority of this investment was planned for regions represented by Republican members of Congress.

However, under the Trump administration in the past year, strict conditions were imposed on manufacturing incentives, and many of the tax credits that drove demand for American-manufactured cleantech products were abolished. Additionally, the administration demonstrated extreme opposition to cleantech initiatives, particularly offshore wind projects, casting a shadow of uncertainty across the entire economy.

Other potential factors may also be contributing to this trend.

The slowdown in cleantech factory investment might be a natural consequence of the market reaching maturity. Many projects announced in the aftermath of the Inflation Reduction Act could have already been completed, or be nearing completion. Another possible explanation is the gravitational attraction of the booming data center industry, which is diverting significant amounts of capital that could have been invested in cleantech factories.

Regardless of the cause, the data suggests that the Trump administration’s policies have weakened the business case for investment in expensive clean energy projects. It is probable that this will lead to an increase in factory cancellations and a decrease in investment in the coming year.