Investor Remains Optimistic on Renewable Infrastructure
TL/DR –
The Inflation Reduction Act, signed in 2022, stimulated a wave of clean energy investments in the U.S., but the trend has been reversed since President Trump’s second term began, resulting in cancellations, closures, and downsizing of green projects. In the first half of 2025, 35 domestic clean energy projects were scaled back or canceled, leading to $22 billion in lost investment and 16,500 lost jobs. Despite declines in other sectors, solar energy projects have remained relatively resilient, with only 12% of announced solar projects being canceled or downsized since the Act’s passage.
U.S. Clean Energy Sector Takes a Hit After Second Trump Term
Since the introduction of the Inflation Reduction Act in 2022, there has been a noticeable uptick in clean energy-related investments. However, this trend took a hit after the re-election of President Trump in 2024, causing a wave of cancellations and downsizing of domestic projects. According to estimates by environmental advocacy organization E2, so far this year, 35 projects have been nixed or scaled back, marking a loss of over $22 billion in investment and 16,500 jobs.
Investment Trends in the Clean Energy Sector
Michael Timberlake from E2 has noted a significant decline in new clean energy investments. During the months following the enactment of the Inflation Reduction Act, there had been a steady flow of over a billion dollars invested in new clean energy projects each month. However, since December of last year, monthly investment has often fallen short of a billion dollars.
The hardest hit sectors have been domestic electric vehicles and battery manufacturing. With a federal bureaucracy opposed to their technology on one side, and Chinese competitors far ahead on the other, these industries face significant challenges. Yet, the bleak outlook does not extend across the entire clean energy sector. E2’s data indicates that large-scale energy generation projects might be mostly unscathed.
Future of Clean Energy Investments
Infrastructure investment firm Generate Capital is banking on the increase in electricity demand for the first time in over a decade. Jonah Goldman, a representative of the firm, believes that cost-competitive grid energy is essential, and therefore continues to invest in renewable energy buildouts, particularly solar energy. This is due to solar energy’s ability to be deployed more quickly, flexibly, and economically than any other form of generation.
Upon analyzing the post-Inflation Reduction Act projects that have been canceled or scaled back, E2 found that solar investments have proven the most resilient. While Trump’s One Big Beautiful Bill maintains investment and production tax credits for most clean energy technologies through 2033, it reduces credits for solar and wind projects that start construction after July 2026 or are placed in service after 2027.
Global Clean Energy Investment
While domestic clean energy investment may be dwindling, there has been a significant increase in global private infrastructure funding during the first half of 2025 compared to the prior two years. Despite this, climate funds around the world primarily invest in the U.S.. This suggests a continued interest in developing domestic clean energy infrastructure.
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