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Ongoing delays and disruptions to a federal rural energy program threaten to disproportionately impact Midwest farmers and Republican congressional districts, experts say.
For more than two decades, the Rural Energy for America Program (REAP) has helped thousands of farmers install solar, energy-efficient grain dryers, biodigesters, wind turbines, and other cost-saving clean energy improvements.
Since 2014, Illinois has benefited more than any other state, with over $140 million in REAP grants, according to federal data obtained by the Chicago-based Environmental Law & Policy Center through a public records request.
Minnesota, Iowa, Michigan, and Ohio are also in the top 10 states receiving grants during that period. REAP proponents say the numbers show what’s at stake as the program faces chaos and uncertainty under the Trump administration.
“It’s popular with all different stripes — not just political stripes, any type of farmer,” said Lloyd Ritter, who helped draft the program as senior counsel for former Sen. Tom Harkin (D-Iowa). “It could be poultry, corn, soybeans, wheat — everybody benefits because the program is so flexible and innovative, you can utilize the program for your type of needs in your area.”
Carmen Fernholz and his wife are among the success stories. The couple has run an organic farm in Minnesota for more than 50 years. Last summer Fernholz used a REAP grant to install a 40-kilowatt solar array. It powers everything on the farm from the electric lawnmower to the heating, and over the last year he’s earned an additional $600 a month on average by sending electricity on the grid back to his rural electric cooperative.
Since 2014, REAP has provided more than $1.2 billion for more than 13,000 solar projects, making up about 70% of the total REAP dollars. More than $292 million went to energy efficiency, including for windows, lighting, heating, and efficient grain driers. Millions more were awarded for biogas, biomass, biofuels, wind energy, hydroelectric power, and other projects.
This has created crucial energy savings and revenue for farmers, as well as important business for solar developers, energy-efficiency auditors, and various types of contractors. Farmers raising livestock and poultry and growing corn, soy, and other crops are the most common recipients of REAP, but funds have also gone to small rural businesses including distilleries, breweries, a car wash, a mental health clinic, a newspaper publisher, and a moving company.
More than 75% of the grants went to congressional districts represented by Republicans. Ritter noted that REAP was a deeply bipartisan effort from the start, led by both Harkin and former Republican Sen. Richard Lugar of Indiana.
“These are their voters,” Ritter said of Republican leaders. “The thing that is so great about REAP is it lowers energy costs and saves farmers money, which ties into the [Trump administration] agriculture secretary’s recent announcements about building rural prosperity and farm security.”
The program was turbocharged by the 2022 Inflation Reduction Act (IRA). Under the federal Farm Bill, REAP grants covered up to 25% of a project’s costs. The IRA created an additional funding source and allowed grants to cover up to 50% of a project’s cost.
More than $1 billion in REAP grants have been promised (or “obligated”) under IRA in just the past two years, while since 2014, Farm Bill REAP grants have totaled $623 million.
More than 80% of the IRA REAP grants — totaling $818 million — were awarded to solar projects, more than 5,000 of them nationwide. Those arrays are expected to generate over 8,000 gigawatt-hours of clean energy annually, according to the federal data.
REAP grants are paid as reimbursement after a project is completed. About $770 million worth of IRA-funded REAP grants have not been paid out yet, according to the data. That’s not surprising given that projects may still be under construction, but after President Donald Trump froze IRA funds earlier this year, some farmers and clean energy advocates are worried about whether promised grants will be paid in full.
Andy Olsen, senior policy advocate for the Environmental Law & Policy Center, has done extensive data analysis on REAP. Given the Trump administration’s hostility toward clean energy, he wonders what REAP will look like in the future.
“Will they support solar and wind projects?” Olsen asked. “This is a crew that likes refineries, likes ethanol, big centralized energy technologies. I could see them only making awards to biomass, ethanol, maybe some energy efficiency.”
In addition to grants, REAP provides loan guarantees for projects. That money does not go directly to the recipient, but the guarantee helps them secure private financing since the government promises to back up the loan if the recipient were to default. More than $3 billion worth of loan guarantees have been made under REAP since 2014, the data shows.
While the majority of REAP grants go to solar and energy efficiency, REAP has also obligated over $115 million to biogas, biofuel, and biomass projects; over $12 million to wind; and more than $8 million each to hydroelectric and geothermal projects.
Battery projects are also eligible for REAP, though only a few of those grants have been made thus far.
Fernholz, the farmer in Minnesota, hopes he can tap such a grant in the future. “The next step for people like myself should be looking at energy storage,” said Fernholz, who grew up on his parents’ farm as one of nine siblings.
He uses sustainable practices like conservation tillage and a tiling system to keep water from running off into nearby rivers. He also has 100 acres of native grassland and wetlands in a conservation reserve program. Solar is a major contribution to these efforts.
“When the REAP grant came through, that was a blessing, the frosting on the cake,” Fernholz said.
A recent U.S. Department of Agriculture policy document, which outlines a strategy to “Make Agriculture Great Again,” says that going forward, REAP will disincentivize solar on “productive farmland.” Ritter is worried that means few ground-mounted solar arrays will receive grants, though he imagines panels on barn and farmhouse rooftops will still be awarded.
“I can understand there are some concerns about the loss of farmland. It’s an emotional issue,” Ritter said. But he notes that housing development is the largest cause of farmland loss. Indeed, the American Farmland Trust reported in 2022 that between 2016 and 2040, the country is on track to convert over 12 million acres of farmland and ranchland to low-density residential development, like scattered houses and subdivisions with big lots. (Another roughly 6 million acres could be lost to higher-density residential development, commercial buildings, and industrial sites, the trust says.)
Ritter said installing solar can actually help prevent such conversions, by providing farmers revenue and energy savings that increase the financial viability of their farms. Meanwhile, agrivoltaic practices — like grazing livestock between rows of panels — mean solar and farming can coexist.
“There are a lot of great ways to do solar on prime farmland,” Ritter said. “You can build energy dominance and farm at the same time.”
Since 2009, Bill Jordan has helped close to 100 farmers write REAP grants to install solar with his company Jordan Energy in upstate New York.
“Electric bills are always in the top 10 expenses of running a farm business,” said Jordan. “Any business that’s going to run itself well will look at those costs. Behind-the-meter solar is a way of offsetting the cost of your own electricity, and it’s a wise diversification of farm revenue.”
Jordan said he has met “farmers who are milking 150 cows and making more money on the solar farm than on milk production. It’s also a diversification that the next generation gets. As farmers do family succession planning, the younger generation gets excited about solar.”
Jordan hopes solar funding under REAP doesn’t diminish because of partisan politics, emphasizing that it drives solar manufacturing and installation jobs along with helping farmers.
“These are good American jobs,” he said. “Let’s not throw out the baby with the bathwater. Creating energy independence is really what this is about.”
June was a monumental month in the European Union: For the first time ever, it got more electricity from solar power than any other source.
Solar provided 22.2% of the region’s electricity, per clean-energy think tank Ember, unseating nuclear and beating out gas and coal combined. Between nuclear, wind, hydropower, and solar, nearly three-quarters of the EU’s power came from completely carbon-free sources.
It’s a striking illustration of how far solar power, and clean energy as a whole, have come in the EU.
A decade ago, solar contributed just 3.5% of the region’s power while coal supplied 24.6%. Those energy sources are now on pace to essentially trade places. Across all of last year, solar beat out coal for the first time as more and more EU member states shutter their polluting coal-fired power plants. The results speak for themselves: Power sector emissions declined by 41% between 2015 and the end of last year.
Europe has been in hyperdrive with clean energy since Russia invaded Ukraine in 2022, destabilizing the region’s main supply of affordable natural gas and sending gas prices soaring. Since then, for reasons of energy security as much as climate consciousness, the EU has made a concerted effort to ditch fossil fuels even faster and rely more on carbon-free energy sources that can be controlled locally.
That push has helped drive fossil-fueled generation to record lows on the region’s power grid. June was coal-fired power’s worst month ever in the EU, accounting for just 6.1% of electricity, largely thanks to Germany and Poland, the bloc’s two biggest coal consumers, burning comparatively small amounts of the fossil fuel. Meanwhile, solar smashed records in at least 13 of the EU’s 27 member states last month.
The milestone comes as the U.S. under the Trump administration moves backward on clean energy. Earlier this month, President Donald Trump signed into law the One Big, Beautiful Bill Act, which will rapidly phase out subsidies for solar and wind energy. Last week, his Energy Department released a controversial report that experts say will likely be used to justify extending the life of aging, uneconomical coal-fired power plants.
While the Trump administration seeks to tether the U.S. to fossil fuels, Europe and much of the world continue accelerating toward cleaner options.
On Tuesday, the president summoned leaders from tech, energy, and finance to Pittsburgh — that Silicon Valley of western Pennsylvania, a veritable Menlo Park on the Monongahela — where executives gushed about Trump’s apparent leadership as if their survival on a dating show depended on it.
At the summit, the industry offered some new insight into how it is thinking about a key question it faces, namely how AI companies are going to find the electricity to fuel their exponential growth. Hint: The answer might not be solar, wind, and batteries.
Investment firm Blackstone, for instance, unveiled a $25 billion strategy to build data centers alongside fossil gas power plants in Pennsylvania, which is rich in natural gas that’s hard to export elsewhere. Loading up the Keystone State with data centers could thus boost the fracking industry, which has plateaued in recent years.
Google brought its own major commitment, but with a clean twist: The tech giant will work with Brookfield Asset Management to relicense a pair of Pennsylvania hydropower plants to funnel up to 3 gigawatts of clean power to data centers in the region for 20 years.
The splashy announcements follow one from Microsoft last fall, in which the tech giant said it plans to bring back a reactor at Three Mile Island (the quietly retired one, not the one that had those problems you may have heard about) and use its output to power computing operations. No nuclear reactor has ever been restarted in the country, though a few restarts are in progress now.
There’s something other than Pennsylvania’s energy-rich geography connecting these three AI-energy plays: They’re banking on big, old-school, slow-moving energy projects to keep pace with the propulsive sprint of AI.
While gas is the No. 1 source of electricity in the U.S., new plants can’t be spun up quickly; top-tier turbine suppliers have warned of multi-year backlogs for that key ingredient. As for hydropower, new construction of major generators has stagnated for decades. Nuclear construction has shown more signs of life, but barely: Two new reactors were started and finished in the last 30 years, way behind schedule and massively over budget.
Meanwhile, the U.S. has been churning out gigawatts of new solar and battery installations, especially in Texas, where free markets reign and jealous incumbents have fewer tools to eliminate competition.
But Trump’s new budget bill whacked the solar and wind sector and threw new foreign-content restrictions at the grid storage industry. Analysts at the Rhodium Group think the budget law will eliminate about 60% of the clean power capacity we would have built in the next 10 years.
The law, then, is manufacturing energy scarcity at the moment when AI tycoons need abundance. Perhaps the long-lead-time technologies of bygone decades will shrug off their sluggishness and meet the moment. But history suggests that’s a risky thing to depend on for the nation’s tech dominance.—Julian Spector
Rural energy funding in turmoil
For over two decades, the Rural Energy for America Program, or REAP, has helped farmers and rural businesses save on energy costs, ranging from installing solar panels to buying more efficient grain dryers. The program has given out billions of dollars in grants and loans in its lifetime, and was infused with another $2 billion by the Inflation Reduction Act in 2022 — but now the Trump administration has cast uncertainty over the future of REAP, Kari Lydersen reports for Canary Media.
After taking office in January, Trump froze over $1 billion in REAP funds. Then, on July 1, the USDA abruptly canceled a grant application window for the program. The administration has also explicitly said it wants the program to deemphasize its most popular function: helping farmers afford solar. Farmers are concerned about the upheaval with the popular program, which, as Kari reports in a second story, largely benefits Republican congressional districts.
Consumers could lose big as Trump pushes fossil fuels
Twice now, Trump has ordered aging fossil-fueled power plants to stay open right as they were about to close. These directives, which energy experts agree are unnecessary, could cost consumers tens or even hundreds of millions of dollars — and some fear Trump might just be getting started, Jeff St. John reports for Canary.
Last week, Trump’s Energy Department released a report that experts say relies on flawed math to bolster the case for keeping old coal-fired power plants online past their planned closure dates. Experts fear the administration will use this report to justify additional orders like the two Trump has already made. If that happens, Jeff reports in a second story that it would be disastrous for Americans, potentially costing them billions of dollars in extra energy costs all to prop up expensive, polluting energy infrastructure that the grid doesn’t need.
Use it or lose it: The GOP megalaw sunsets tax credits that make it cheaper to do things like install solar, get a heat pump, or buy an EV, meaning consumers must act quickly to lock in discounts. (Canary Media)
Radioactive rubber stamp: Sources say a Department of Government Efficiency representative told high-level Nuclear Regulatory Commission officials in May to “rubber-stamp” new nuclear reactor designs. (Politico)
A breath of fresh air: Window-unit heat pumps perform well on key metrics like cost, ease of installation, and customer satisfaction, according to a new report examining their deployment in New York City public housing. (Heatmap)
Power-line politicking: Sen. Josh Hawley, a Missouri Republican, says he has secured a commitment from the Energy Secretary to cancel a $4.9 billion federal loan to build the Grain Belt Express transmission line, which would carry as much as 5 gigawatts of wind power from Kansas to other states. (New York Times)
Clean and carefree: Even after the GOP’s new law phases out subsidies for solar and wind in the U.S., the energy sources are “economically unstoppable,” a report from Columbia Business School finds. (news release)
Take me home, solar roads: A 5-MW solar canopy proposed for a two-mile stretch of highway median in Lexington, Massachusetts, would be the first such project in the country; developers are confident construction will begin in time to take advantage of expiring federal tax credits. (Lexington Observer)
Ohio’s OK: A major solar project in Ohio receives state approval despite strong local opposition and fossil-fuel-funded misinformation. (Canary Media)
Offshore headwinds: The U.S. EPA declares that Maryland environmental regulators last month improperly issued a permit for the US Wind project off the state’s coast, but Democratic Gov. Wes Moore says he is determined to push forward with offshore wind despite federal challenges. (WBFF)
Emily Walker has been tracking the damage the Republican megabill will do to a solar industry that’s helped roughly 5.4 million households put panels on their rooftops. It isn’t pretty.
“This is a net harm for the industry, especially for the long-tail installers and the small local businesses that have built this industry from the ground up,” said Walker, the director of content and insight at EnergySage.
While big national solar installers like Sunrun get a lot of attention, the majority of the U.S. home solar market is made up of smaller companies, ranging from regional installers to mom-and-pop businesses, she said.
These regional and local companies, often referred to as the “long tail” of the U.S. rooftop solar business, use EnergySage’s online solar marketplace to reach prospective customers and can expect to bear the brunt of the cuts to federal incentives cuts in the law passed by Republicans and signed by President Donald Trump earlier this month.
At the end of 2025, an incentive that’s helped offset the cost of rooftop solar for two decades will disappear. For all but a brief period in 2020, the Residential Clean Energy tax credit, known as 25D for its place in the tax code, has shaved 30% off the cost of a residential solar system, whether homeowners buy it for cash or finance it via a loan. That equates to about $8,400 that a household can save on a typical 11-kilowatt, $28,000 rooftop solar system.
Losing the tax credit will erode the economic benefits of solar, putting it out of reach for many homeowners and making it less valuable to those who can still afford it. It will take the average household several years longer to break even on their rooftop solar investment without the incentive in place.
“Fewer people will be able to go solar, and they will not be able to benefit from the energy cost savings of going solar,” said Glen Brand, vice president of policy and advocacy at Solar United Neighbors, a nonprofit that has helped organize tens of thousands of households to secure lower-cost rooftop solar. “That’s just a fact.”
It’s yet another blow to an industry that’s already struggling with rising interest rates and some negative state-level policy developments, including the steep cuts of net-metering values in California, the country’s largest rooftop solar market. In the U.S., residential solar sales fell last year for the first time since 2017, according to analysis firm Wood Mackenzie.
The new law’s solar-incentive clawbacks will make things worse. Wood Mackenzie’s recent “low case” forecast indicates that the U.S. will see a 42% decline in residential solar installed between 2025 and 2029 compared with what would have been installed with the tax credits in place.
“Many residential solar companies will be able to diversify and survive,” said Wood Mackenzie solar analyst Zoë Gaston. But “we do expect that some residential solar companies will not be able to adapt.”
That will mean “massive layoffs,” EnergySage’s Walker said. The Solar Energy Industries Association estimates that the phaseout of 25D could lead to about 84,000 job losses by the end of 2026. Of the more than 150 smaller solar installers surveyed by EnergySage, 92.3% said the law’s changes will harm their businesses, and 63% said it would “dramatically harm” their future prospects.
The sudden loss of tax credits compounds smaller installers’ challenges, Walker said. “Even if they were given another six months a year, they could pivot business models,” she said. But for “businesses this small, their margins are not huge. They don’t have the bandwidth, while trying to serve as many customers as they can through this year to claim the tax credit, to also pivot.”
Barry Cinnamon, CEO of solar and battery installation firm Cinnamon Energy Systems, said his strategy is to do as many tax credit–backed projects as possible in 2025 and then retrench. “Nobody wants to admit they’re going to have to cut overhead by 30% or 40% or more,” he said. “But for the solar hardcore people who want to stay in the business, you’ve got to cut your costs back.”
Despite the bad news for rooftop solar, the share price of Sunrun, the country’s top residential solar and battery installer, has not cratered over the last two weeks. Instead, it’s rallied since the law’s passage — and that’s because the law offered a bit more runway to a separate tax credit that large companies can use to facilitate third-party ownership structures for rooftop solar.
For more than a decade, nationwide solar companies like Sunrun, Tesla Energy, Freedom Forever, Trinity Power Systems, and the now-bankrupt Sunnova, SunPower, and Titan Solar Power have offered households solar systems through leases or power purchase agreements. Under those structures, companies maintain ownership of the solar systems, which allows them to utilize tax credits designed for utility-scale solar, wind, and other clean energy projects.
Under the Inflation Reduction Act, those decades-old tax credits were replaced this year with a 30% “tech neutral” investment tax credit, known as 48E for its place in the tax code. Republicans initially aimed to eliminate those tax credits for solar and wind power almost immediately. But the final version of the law allows companies to continue to claim them for projects that begin construction before July 4, 2026, as long as they reach completion within four years of that start date, and for projects that are connected to the grid by the end of 2027.
This means that, starting next year, households are going to have two options, Julien Dumoulin-Smith, head of equity research for power, utilities, and clean energy at investment firm Jefferies, said during a Latitude Media podcast last week. They can spend or borrow money to purchase a system without the benefit of tax credits, or they can sign up with a third-party owner that “can qualify for the tax credits, and indirectly flow that back to you in the form of a lower cost arrangement or offtake price,” he said.
That’s a significant advantage for third-party-ownership solar companies, which have regained market share against competing loan-based solar business models amid the rising interest rates of the post-Covid years and now make up roughly half the U.S. residential solar market.
But the pathway for third-party solar companies to tap federal tax credits remains challenging.
In the midst of the megabill’s passage from the Senate to the House of Representatives, Trump issued an executive order calling on the Treasury Department to quickly set guidelines to “strictly enforce the termination” of the solar and wind tax credits, with specific instructions to examine “restricting the use of broad safe harbors unless a substantial portion of a subject facility has been built.”
That throws many of the assumptions on which third-party residential solar companies might build their business into uncertainty, Dumoulin-Smith said. Today, clean energy projects can secure start-of-construction dates for projects by buying at least 5% of the equipment and materials going into them under “safe harbor” provisions. But if the Treasury Department alters that understanding, perhaps by increasing the proportion of prepurchased equipment required, “that’s a big question mark here on what this means for residential solar in 2028 and 2029 and 2030,” he said.
Jenny Chase, lead solar analyst with BloombergNEF, warned of another potential trap: the law’s “foreign entity of concern” (FEOC) rules, which bar tax credits to companies with ties to China. It’s possible that the Treasury Department will issue guidance to “make it essentially impossible to prove there are no components, materials, or intellectual property from China, which would mean that anything not safe-harbored in 2025 cannot claim tax credits,” she said.
The Treasury Department is required in the law to issue its guidance by 2026, though several agency rulemakings under the Biden administration took longer than expected, and the Trump administration has since cut staff at the department.
These same risks extend to the lithium-ion batteries being added to a growing number of residential solar systems. The final version of the megabill allows projects using batteries to claim tax credits for them through the end of 2033, but only if they can meet FEOC restrictions — and most of the world’s lithium-ion batteries have materials and components made in China.
Cinnamon noted that regional installers like his company can partner with third-party solar providers, and he’s actively investigating his options. “But it’s also crazy, because nobody knows what the rules are, due to FEOC and changes in safe harbor.”
“It’s very hard to make specific financial and investment plans in this environment,” he said. “We don’t think it’s going to change — we know it’s going to change.”
Arrayed against all these downsides are some glimmers of hope for rooftop solar, however, including its seemingly inexorable decline in cost. That’s true even in the U.S., where solar system costs remain stubbornly higher than in the rest of the world.
According to the National Renewable Energy Laboratory, the cost of U.S. residential solar systems fell from an average of $8.60 to $2.70 per watt from 2010 to 2023, a 69% decline.
It’s now more affordable to install rooftop solar in large part because solar panels themselves have simply gotten much cheaper. While tariffs have bumped up U.S. prices in recent years, solar equipment costs now represent only a fraction of total installation costs.
Instead, it’s the “soft costs” — acquiring customers, designing systems to meet households’ needs, navigating lengthy permitting processes, securing utility interconnections, and offering long-term maintenance and operations support — that dictate the price tag of a system in the U.S. It’s in those areas that the industry will need to improve in order to make solar more affordable once tax credits disappear.
As Walker noted, state and local governments can be extremely helpful in driving down those costs. States have passed laws to streamline solar project permitting, and cities and counties have installed “instant permitting” software platforms that can dramatically cut wait times and administrative costs. Some utilities are starting to offer incentives to customers that enlist solar and battery systems in “virtual power plant” programs that reduce grid stresses and utility costs.
Rising utility rates themselves are also a counterweight to losing tax credits. The megabill’s cuts to clean energy incentives are expected to force utility rates upward by increasing the cost and restricting the expansion of solar, wind, and batteries, which make up the vast majority of new generation that can be added quickly to the grid, at a time of spiking demand for power from data centers, factories, and broader economic growth.
“There are basically only two ways to reduce and control your energy costs,” Solar United Neighbors’ Brand said. “One is to use less energy, through energy efficiency, insulation in your home, more efficient appliances, etc. The other is to reduce your fuel costs. With solar, your fuel costs are zero.”
President Donald Trump got his “One Big, Beautiful Bill,” and a Fourth of July signing ceremony to boot. America got the removal of 11.8 million people from health insurance programs, tax cuts that mostly benefit the wealthy — and the dissolution of both longstanding and newly erected pillars of energy and industrial policy.
The One Big, Beautiful Bill Act is a law not of creation but destruction. It’s the antithesis of former President Joe Biden’s Build Back Better Act, which was ultimately pared down into the Inflation Reduction Act in 2022. That law sought to push America toward the future, toward clean energy. This new law tethers the country to the past, to coal and oil and gas.
It eliminates a set of subsidies that have, over decades, helped solar and wind mature from niche technologies to cornerstones of our power grid. It scraps tax credits for rooftop solar, electric vehicles, and heat pumps, making it more expensive for the average person to buy these cleaner options. It threatens to pull the rug out from under manufacturers who, encouraged by the incentives created by the Inflation Reduction Act, had chosen to build new factories to make products like solar panels and lithium-ion batteries in the United States.
Jobs will be lost. Energy will get even more expensive. Billions more tons of carbon dioxide will escape into the atmosphere, needlessly, trapping more and more heat under the lid of a planet that is already boiling over.
Though dozens of congressional Republicans voiced their support for various clean energy subsidies in recent months — and though Republican congressional districts benefit most from the manufacturing boom the incentives have created — Trump’s signature legislation ultimately faced almost no resistance. Browbeaten by the president, every GOP lawmaker who had signed onto letters supporting clean-energy incentives voted for the law, save one. That lone holdout was Sen. Thom Tillis of North Carolina, who had announced his retirement days before.
In effect, the new law repeals much of the Inflation Reduction Act, a landmark law that was not only helping the United States reduce its carbon emissions, but also gave the country a much-needed injection of industrial policy. It was a rare, coherent attempt to marshal the might of the U.S. government to boost an industry — in this case, clean energy — deemed critical to national interests.
That policy was working.
After the law went into effect and introduced a new subsidy for clean-energy factories, the long-stagnant U.S. manufacturing and industrial base began to undergo a remarkable revitalization.
Firms unveiled plans to invest more than $100 billion to build solar-panel and EV and battery factories that would create an estimated 115,000 jobs. Construction spending on U.S. manufacturing facilities grew far faster than it has since the turn of the century. One major metal company announced plans to build the first new aluminum smelter in the U.S. in 45 years, the result of an ambitious Biden-era program that sought to power heavy industrial processes without fossil fuels. That same program spurred plans for futuristic new steel plants that would operate without coal. The Trump administration dismantled that program in May, and the fate of those projects remains unclear.
The Inflation Reduction Act greatly accelerated the development of clean energy. This trend was underway before Biden’s law went into effect, thanks to a pair of tax credits, one of which dates back to George H. W. Bush’s administration and the other of which to the second term of George W. Bush. Biden’s signature climate law took these existing policies and expanded them, turbocharging the already-rapid rise of renewables. The results speak for themselves: As of last year the U.S. now gets more electricity from wind and solar than from coal. Big grid batteries have helped Texas and California keep the lights on during heat waves.
Now, with the repeal of those and other incentives, it’s expected that the U.S. will plug somewhere between 57% and 72% less clean energy into the grid over the next decade. Because clean energy accounts for nearly all new electricity capacity built in the U.S., it’s unclear what, if anything, would fill in that gap. It won’t be new gas-fueled plants — turbine orders are severely backed up. The solar, wind, and battery projects that do get built will be more expensive because the clean-energy subsidies are now gone. Those higher costs will be passed on to households and businesses, exacerbating the energy inflation Americans are already dealing with.
The timing could not be worse. Around the country, demand for electricity is anticipated to grow at a pace not seen in years. One of the biggest drivers is the proliferation of data centers that underpin increasingly popular AI systems like ChatGPT — and can use as much power as a small city. Making energy scarce right when it’s needed most will put even more upward pressure on power bills. And without abundant electricity, the U.S. will struggle to compete with China on AI.
China already dominates all things clean energy, making and installing more of all its various forms than most other countries combined. The Inflation Reduction Act was meant to help the U.S. wrest some control back from China in those technologies. The One Big, Beautiful Bill Act will instead put the U.S. further behind on clean energy, and possibly AI too.
It’s difficult to square the destruction of these policies with Republicans’ stated priorities.
The GOP and Trump himself have repeatedly extolled the virtues of affordable and abundant energy. They’ve spoken about the need to bring manufacturing jobs back to America. They say they want to maintain economic competitiveness with China, and certainly want to come out ahead in the AI race.
And yet the One Big, Beautiful Bill Act will essentially eliminate the only industrial policy the U.S. had in place to enable it to accomplish those goals.
Maybe the fossil fuel money, which has flowed toward Republicans and Trump like an oil spill, explains this behavior. Or perhaps, as writers like Derek Thompson have suggested, all of this is simply about owning the libs. Certainly fear of crossing Trump forced Republicans to fall in line. He wanted badly to extend his tax cuts, and slashing clean energy will help pay for a tiny portion of doing so.
Some congressional Republicans have reasoned that solar, wind, EVs, and other forms of clean energy are mature enough to no longer need subsidies. It’s true that these technologies have come a long way, but fossil fuels continue to receive hundreds of billions of dollars in subsidies in the U.S., according to the International Monetary Fund. There are no signs that this spigot will be turned off. In fact, the GOP’s bill will toss one slice of the industry another $150 million each year in direct subsidies.
Whatever the reason, the effect is clear. The U.S. under Trump has hitched itself to fossil fuels, to combustion, to literally ancient forms of energy that more forward-thinking countries will be leaving behind in the coming decades. For reasons economical as much as ecological, the future will be dictated by clean energy.
President Donald Trump’s new “big, beautiful” law repeals many — but not all — of the U.S.‘s clean-energy tax credits. The incentives that remain, though, could still prove prohibitively complex, rendering them effectively useless for energy project developers and manufacturers.
That’s because of a provision in the bill aimed at restricting Chinese companies and individuals from benefiting from those tax credits. These restrictions on “foreign entities of concern” — “FEOC” for short — combine harsh penalties with very little guidance on compliance. The impact of rules meant to limit U.S. funds flowing to China could, ironically, be to undermine U.S. efforts to compete with China, which dominates many of the industries that will bear the brunt of the requirements, experts say.
The ramifications of FEOC rules will be felt most by developers of grid-scale battery, geothermal, and nuclear energy projects as well as by companies that produce batteries, solar panels, and critical minerals in the United States. The law preserved tax credits for these sectors until the 2030s, subject to FEOC provisions.
The FEOC provisions in the bill passed last week aren’t as strict as those that emerged from a House version of the bill in May, experts say. But they’re still complex enough that experts fear it will take the U.S. Treasury Department a long time to finalize its rules for compliance. The bill sets a deadline for the department to issue its FEOC rules by the end of 2026.
During the Biden administration, the department took a year and a half to craft rules for a much narrower set of FEOC restrictions for electric vehicle batteries under the Inflation Reduction Act. It’s unlikely the agency — understaffed and overworked following cuts from the Trump administration — will be able to finalize rules for these much broader restrictions in a timely fashion, said Ted Lee, a former Biden administration Treasury official who worked on those EV tax credits.
That puts the industry in a bind. Until the guidance is finished, it will be risky for companies to claim tax credits — and riskier yet for the investors who finance clean-energy projects and factories by purchasing these credits to offset their own tax bills. These entities would face the risk of eventually having their tax credits clawed back if they’re later found to be in violation of the as-yet-unwritten rules, Lee said, among other penalties.
“When I talk to developers, manufacturers, lawyers, and tax insurers and other participants in this market, they’re not sure how they’re going to deal with this,” Lee said. “There’s a risk that some projects get so burdened in compliance and red tape that projects and investments that should move forward will not be able to.”
To make matters more challenging, the IRS has a long time to challenge tax credit claims, said Andy Moon, CEO and cofounder of Reunion Infrastructure, a company that offers software and services to support the multibillion-dollar market for tax-credit transfers. The department has six years after a return is filed, and can assess a 20% penalty for incorrect claims — in addition to clawing back the value of the credit.
The confusion ultimately threatens to put hundreds of billions of dollars worth of planned investment in clean-energy projects and factories on ice while companies wait for the details to take shape. It could also sow chaos for the hundreds of billions of dollars worth of existing projects that have been built with the assumption that they could access Inflation Reduction Act tax incentives.
It’s unclear whether every company will be able to find alternative suppliers that comply with the FEOC rules. China makes most of the world’s solar and lithium-ion battery materials and components, including those used in domestic installations and factories. For some projects, that might be OK. Certain energy developments and factories will still make economic sense without tax credits. But plenty won’t.
“The industry has not yet fully absorbed the potential impact of FEOC rules, which will kick in starting in 2026,” said Moon. “And I think that some market participants are looking at it and raising the alarm bells.”
In particular, the “material assistance” rules that go into effect next year will prove a challenge for firms, Moon said. Under those rules, factories and energy projects seeking to claim tax credits must have an increasing proportion of materials coming from companies and sources that aren’t linked to FEOC.
For manufacturers seeking credits under the Inflation Reduction Act’s 45X program, those proportions will rise from 60% in 2026 to 85% in 2030 for lithium-ion batteries, while the proportions for solar manufacturers will rise from 50% to 85% over the same time period, for example. Manufacturers of other products have their own ratios, as do wind, solar, battery, geothermal, and nuclear power projects.
It won’t be easy for companies to prove they’ve met those thresholds, Lee said. “To do that, you have to go through a calculation that’s described at a high level in the text” of the bill, he said. “But the details of how you do that calculation are somewhat unclear,” with only passing reference to existing domestic-content “safe harbor” guidance for solar, wind, and battery projects.
Yogin Kothari, chief strategy officer for Solar Energy Manufacturers for America, a coalition of U.S. solar-equipment makers, said that the companies in his organization are working with the Trump administration and members of Congress to forward “a set of rules that supports domestic manufacturers and drives demand for domestic manufacturing. Anything that undermines that will have a negative impact on these manufacturing communities.”
GOP lawmakers have good reason to develop workable rules: The vast majority of manufacturing investment generated by the Inflation Reduction Act is flowing to Republican congressional districts.
Spencer Pederson, senior vice president of public affairs for the National Electrical Manufacturers Association (NEMA) trade group, highlighted the work that the organization and its member companies have taken to comply with existing “Build America, Buy America” rules set by the 2021 Infrastructure Investment and Jobs Act. Those kinds of efforts could help companies prepare to comply with the FEOC rules set to emerge from the Treasury Department, he said.
“NEMA is going to work with Treasury as best as possible to ensure that the guidance is clear and consistent and produced in a timely enough manner for companies to use the credit for those that wish to take advantage of it,” he said. Even so, “there’s going to be a decision for a number of companies and organizations as to whether or not the juice is worth the squeeze.”
But some sectors don’t have an existing framework to look to. Such guidance doesn’t exist for geothermal and nuclear power projects, or for inverters and other grid equipment, noted Advait Arun, senior associate for energy finance at the Center for Public Enterprise, a nonprofit think tank. Until the Treasury Department releases guidance on those technologies, “it’s going to be tough, if not impossible” for developers of those projects to know how to calculate their exposure to FEOC, he said.
Even if Treasury guidance does eventually offer some clarity, companies are almost certainly going to struggle to obtain the depth of information the FEOC rules in the bill appear to require. Companies tend to be secretive about their exact suppliers, Lee said, adding that this difficulty was part of what slowed down the Biden administration’s rulemaking around domestic content requirements.
“Even if you know what you’re trying to calculate, actually getting that information from your suppliers — and in many cases your suppliers’ suppliers,” as the FEOC rules require, Lee said, “is going to be extremely difficult.”
Ultimately, the extent to which this complexity slows down growth in clean energy and manufacturing construction will depend on the Treasury’s guidance, which could take years to be issued.
“I don’t know yet how hard [compliance] is going to be,” said Harry Godfrey, head of federal affairs for trade organization Advanced Energy United. “It depends on where the administration engages in additional guidance, and if it’s helpful — which we hope it would be — or if it is disruptive.”
Even before those “material assistance” restrictions begin next year, companies will need to prove they aren’t what the FEOC rules define as “specified foreign entities” or “foreign-influenced entities” to ensure they are eligible to receive tax credits.
“Those rules come into effect regardless of when you start construction,” Lee said.
These restrictions could embroil many factories and projects already built or under construction. More than 100 existing or planned U.S. solar or battery factories are owned by Chinese parent companies or backed by majority-Chinese shareholders, according to BloombergNEF analysis obtained by Heatmap.
Other companies “might not actually be owned or influenced by Chinese companies, but maybe they haven’t done all the many tests now required to prove that,” Lee said. “There’s going to be this immediate compliance hit, even for projects that have begun production or [are] about to get turned on.”
Companies under majority-Chinese ownership, such as Japan-based lithium-ion battery manufacturer AESC, have already frozen hundreds of millions of dollars’ worth of U.S. factory plans. House Republicans have previously attacked other projects that license Chinese technology, such as Ford Motor Co.’s battery plant in Michigan that uses technology from China-based battery giant Contemporary Amperex Technology Co., Limited (CATL).
“Effective control” provisions that direct the Treasury to write guidance that could bar tax credits to projects or factories that have made contract or licensing payments to specified foreign entities are particularly problematic, Lee said. “There’s an extremely broad category of things that could be caught up in that, particularly in the battery space.”
Overshadowing all these uncertainties is the fear that the Trump administration will not engage in the same good-faith approach that the Biden administration took to work with U.S. companies in their efforts to comply with FEOC rules.
Already, reports have surfaced of a deal struck between members of the ultraconservative House Freedom Caucus and Trump, who reportedly has agreed to impose administrative burdens and aggressive interpretations of agency rules to prevent solar and wind projects from being able to use the tax credits that remain available to them over the next two years.
On Monday evening, Trump issued an executive order calling on the Treasury to “take prompt action” within 45 days of the One Big, Beautiful Bill’s enactment to implement the law’s FEOC restrictions. “Reliance on so-called ‘green’ subsidies threatens national security by making the United States dependent on supply chains controlled by foreign adversaries,” the order says.
Under the new law, Republicans in Congress could choose to launch investigations into companies and refer their claims to the IRS.
“Historically IRS enforcement has been independent from the political appointees in the executive branch,” Lee said. “The norms and laws that provide that protection are being eroded by this administration. As a result, it’s quite concerning to think about what actions the Trump administration might put pressure on the IRS to take, and what enforcement priorities this administration would have.”
Lee noted that tax-credit financing structures have always had to deal with the risks that credits might be challenged by the IRS, with insurance products and careful lawyering by counterparties in tax-equity and tax-credit transfer deals. But the One Big, Beautiful Bill Act introduces a deeper level of risk than ever before.
“There will be some kind of framework for risk-mitigation strategies that will arise to handle these issues,” Lee said. “The question is, how quickly will that happen — and how much risk will the market be willing to take on?”
An update was made on July 8, 2025: This story has been updated to include details on Trump’s July 7 executive order regarding the implementation of FEOC rules.
On June 30, after an exhausting round of late-night negotiations, Delaware state legislators passed a bill to effectively green-light the Southeast’s second offshore wind farm. Within days, lawmakers in Washington passed legislation that may doom its future.
MarWin, the first phase of a 114-turbine project off the Delmarva Peninsula, is slated for installation in 2028 with onshore construction possibly starting next year, but that timeline is perhaps unrealistic, said Harrison Sholler, an offshore wind analyst with BloombergNEF. MarWin doesn’t have its financing in place yet to underwrite construction and, to make matters worse, Congress just unleashed a crushing new deadline.
When President Donald Trump signed the “Big, Beautiful Bill” on Friday, he dramatically shortened the window in which offshore wind projects can qualify for tax credits that offset up to 30% of their costs. The law now requires new wind farms be “placed in service” by the end of 2027 or begin construction by July 4, 2026, to qualify.
“We don’t predict any new offshore wind projects starting construction … at least in the next four years,” Sholler told Canary Media two days before Congress passed the bill.
He described Republicans’ tightening of the tax credit — from an original deadline to start construction by 2033 or potentially later, to this one-year sprint — as the final nail in the coffin for offshore wind farms that are fully approved but not currently underway. Two projects — MarWin near Maryland and New England Wind off the Massachusetts coastline — float in this gray zone, and are now vulnerable to being put on ice indefinitely.
Wind developers have faced mounting hurdles in recent months: new tariffs, a federal permitting pause, higher investment risk, and the looming threat of the Trump administration halting already-approved projects, like it did in a shocking monthlong pause on New York’s Empire Wind.
A BloombergNEF report released in April states that losing the Inflation Reduction Act tax credits, known as 45Y and 48E, would be “devastating” for U.S. projects already in the pipeline. Analysts estimate that the electricity produced by offshore wind farms that qualify for the credits costs on average 24% less over a project’s lifetime.
That April report predicted “all but the most advanced projects [will] pause development activities.” Now, with tax credits officially rolled back, prospects for offshore wind appear even more dim.
“If you take away the tax credits, it doesn’t make much sense to develop an entirely new sector,” said Elizabeth Wilson, a professor of environmental studies at Dartmouth College who studies offshore wind policy.
America’s offshore wind sector is still in its infancy. While the U.K. has already built over 50 wind farms in its waters, America has only completed one large-scale project: South Fork Wind, located off the coast of Long Island, New York.
Trump issued an executive order on Inauguration Day that froze all offshore wind permitting and leasing pending a federal review. Seemingly safe from the president’s ire at the time were eight projects, including MarWin, that already had all their federal permits in hand. Since then, at least one of those permitted projects — the 2.8-gigawatt Atlantic Shores project off the New Jersey coast — has fallen apart. Five are currently under construction.
The largest offshore wind project now being built in America — Dominion Energy’s 2.6-gigawatt Virginia project — appears unscathed by the Inflation Reduction Act rollback.
“There is no impact to Coastal Virginia Offshore Wind. The project is nearly 60 percent complete and is on schedule to be completed in late 2026,” wrote Jeremy Slayton, a spokesperson for Dominion Energy, in an email to Canary Media, dispelling concerns that the 176-turbine project off the Virginia coastline would suffer from the scaleback of tax credit eligibility.
The existing tax credits Dominion expects to secure “will result in substantial savings for our customers,” he added.
Dominion has so far spent approximately $6 billion on this monumental project. Some in the industry feared that the impact of Trump’s reconciliation bill could have been far worse, and are celebrating that the five wind farms under construction might see full operation.
“While this fight is over, I’m incredibly proud of Oceantic’s members and staff,” said Liz Burdock, president and CEO of the offshore wind industry group, in a July 3 statement after Congress passed the bill. “Because of their relentless push, developers now have one year to start construction and retain 100% of their tax credits, with a simple ‘safe harbor’ option.” (On Monday, Trump issued an executive order that tries to further limit the bill’s “safe harbor” and “beginning of construction” options.)
But for Maryland and Delaware state lawmakers who backed MarWin in the face of considerable county-level pushback in recent months, the “Big, Beautiful Bill” is a major blow. The project’s turbines were slated for installation off Maryland’s coastline but its cables would come ashore in Delaware, making it a much-anticipated joint investment.
On June 30, Delaware’s Democratic lawmakers passed a bill that strips Sussex County officials of their ability to revoke local permits for certain aspects of the wind project. A county-level block on an onshore substation was MarWin’s final hurdle and clearing it meant construction on the substation could, in theory, begin as early as February of next year.
“This bill helps eliminate unlawful and unnecessary hurdles to a project that will help ensure electric reliability for Delawareans while lowering the price they pay for electricity,” Nancy Sopko, a spokesperson for MarWin developer US Wind, told Canary Media via email.
But whether US Wind can lock in financing and officially break ground by July 2026 — the new deadline for tax credit eligibility — is another story. US Wind is suing the Sussex County Council over the permit denial in hopes of starting earlier, before the new state law goes into effect.
Before signing the final bill, Delaware’s Gov. Matt Meyer (D) said it is important to get the offshore wind energy project “done quickly and safely to provide sustainable power to Delaware.” Within days, however, MarWin had potentially been rendered incapable — at least in the view of analysts — of taking advantage of the tax credits that would make its construction financially possible.
The megabill passed by Republicans in Congress and signed into law by President Donald Trump last week creates many challenges for clean energy — enough to choke off lots of new solar and wind power projects, and cast uncertainty over everything from battery storage deployments to EV factories.
The only saving grace is that it could have been much worse.
The new law could reduce investment in solar and wind projects by about $141 billion and kill 81 gigawatts of potential new generation capacity through 2033 compared to what would have happened if it didn’t pass, according to estimates from solar and battery project investor Segue Sustainable Infrastructure.
But previous versions of the bill from House Republicans, and a draft unveiled by Senate Republicans on June 28, would have spelled the demise of more than twice as much clean power and domestic investment, according to Segue’s previous analyses.
What changed? A handful of Senate Republicans, pressed by clean energy advocates, amended the bill in the industry’s favor, averting “a complete catastrophe,” according to David Riester, founder and managing partner of Segue, which is involved in about 120 solar and battery projects across the country.
Nevertheless, the law still rapidly phases out tax credits for solar and wind.
Under the Inflation Reduction Act, projects that started construction before 2033 were assured tax credits that they could use or sell to reduce the cost of building, and thus, the price of the power they offer to long-term offtakers, like utilities or corporations. Although the new law largely preserves that timeline for geothermal, nuclear, hydropower, and battery storage development, it dramatically tightens the deadlines for wind and solar projects, requiring them to either be operating by the end of 2027 or start construction by next summer to access incentives.
Developers and financiers like Segue now have 12 months to decide whether they believe a given wind or solar installation can hit the milestones required to access crucial tax credits.
If they don’t think it can, they’ll pull out of the project. That could mean a lot of abandoned plans for Segue, whose portfolio is mostly made up of earlier-stage developments.
“We often pose the question to each other: ‘If we lean into this, are we investing, or are we gambling?’’’ Riester said. “There are some project profiles for which the answer will almost certainly be ‘gambling’ a year from now, and we will kill those.”
Segue isn’t alone. Financiers and developers across the country are grappling with this as they consider whether to move forward with much of the hundreds of gigawatts of solar, battery, and wind projects being planned around the country.
“When you rip the rug out suddenly, it creates a moment where the owners of all these projects, in their various stages of development, have to face the fact that they don’t know exactly what their revenue line is going to look like,” Riester said.
Developers ultimately have little control over when a project can connect to the grid and start delivering power. That’s why the most vital change in the final version of the bill is one pushed by Sens. Joni Ernst (R-Iowa), Lisa Murkowski (R-Alaska), and Chuck Grassley (R-Iowa), which gives wind and solar projects until July 4, 2026, to start construction to secure tax credit eligibility.
Projects that meet this deadline will be eligible as long as they’re completed and placed in service within four years of start of construction. Previous versions of the bill would have given those projects only 60 days to commence construction, and then required them to be placed into service by 2028 to win credits.
But project developers called the “placed in service” deadline tantamount to an immediate tax-credit cutoff, given the impossibility of being able to assure investors that they’d be able to get online in time. Already, grid bottlenecks force projects to wait an average of five years to secure interconnection.
The “commence construction” status is the traditional hinge point for tax credit eligibility. It’s far more within a developer’s control than placing a project into service, and can be verified using established methods like the “5% safe-harbor test,” which involves incurring 5% or more of the total cost of the facility in the year construction begins.
With 12 months to reach this construction milestone, project developers have “a bit more time to see how projects’ existing development risks evolve before the ‘Do I safe harbor this project?’ question requires an answer and action,” Riester said.
There is a cloud hanging over relying on safe harbor provisions, however, noted Andy Moon, CEO and cofounder of Reunion Infrastructure, a company working in the multibillion-dollar market for clean-energy tax credit transfers. President Trump issued an executive order on Monday directing the Treasury Department to issue guidance restricting the use of “broad safe harbors unless a substantial portion of a subject facility has been built.”
That’s a “significant departure” from what project developers were planning for, Moon said. “Developers are scrambling to figure out how the Treasury might modify safe harbor rules.”
Not all of the wind and solar farms that could get started in the next 12 months will be able to, said Jim Spencer, president and CEO of Exus Renewables North America, a company that owns and builds clean energy.
The new mid-2026 deadline will launch a rush to secure all the equipment that projects require. Some developers will inevitably be crowded out, unable to buy what they need in time.
“We’re a well-capitalized developer with the ability to buy equipment in advance,” Spencer said, but not all firms are in the same position. “A lot of the less well-capitalized developers may have good projects. But if they can’t grandfather those projects, either by starting construction or by procuring equipment, there’s not much of a value proposition there.”
That looming deadline also presages a big drop in new solar and wind projects later this decade, once the last ones eligible for tax credits are built.
“You’ll have a rush of safe-harboring” before the 12-month period expires, Moon said. “But greenfield development is going to freeze after that until the market adjusts.”
That’s because energy buyers won’t immediately want to accept the higher prices set by developers who lack the financial boost of tax credits. “There’s going to be a price-discovery phase, when project developers all of a sudden are missing capital for 30% to 40% to 50% of their project costs,” he said. “Electricity prices are going to have to rise significantly to make up the shortfall.”
Wholesale electricity prices could increase 25% by 2030 and 74% by 2035 due to the loss of low-cost renewable energy and a rise in the cost of fossil gas to fuel the power plants that will need to make up the difference, according to modeling of the law from think tank Energy Innovation.
The process of price discovery will lead to what Riester described as a “price correction” — energy buyers coming to terms with how much more expensive electricity will become and making deals accordingly. But that will take some time.
In the meantime, there will be a gap in the deployment of clean energy — by far the biggest source of new power on the U.S. grid. That gap will have consequences as power demand is climbing nationwide.
Slower power-plant growth will significantly disrupt the electricity needs of factories, data centers, big-box stores, and “everything that we want to bring back onshore” that are “teed to these power projects,” Sen. Thom Tillis (R-N.C.), one of three Senate Republicans who voted against the bill, said in a speech on the chamber’s floor in late June. The disruptions will cause “a blip in power service, because there isn’t going to be a gas-fired generator anytime soon.”
Developers face wait times of five to seven years for new gas turbines. Nuclear and geothermal power plants take even longer to build.
Eventually, the market will find a new equilibrium. If solar, wind, and batteries are the only power sources that can be built quickly in the near term, utilities and corporate customers will figure out a price they’re willing to pay.
“But on the way to that steady state, there will be a lot of rockiness in the market,” Riester said. During that time, Segue and many other energy-market observers predict a significant shortfall in new power supply to meet demand.
“There will still be tons of projects in that 2028 to 2031 window that get killed because visibility into economic viability fails to arrive before development expenses become uncomfortably high,” Riester said. “That’s where the capacity shortage is likely to peak” — when Trump’s presidency will be over.
As the Trump administration doubles down on fossil fuels, the rest of the world is investing more and more in clean energy.
This year, $2.2 trillion will be invested in clean energy, efficiency, and electrification globally, according to the International Energy Agency — double the $1.1 trillion that will flow toward fossil fuels.
It’s a remarkable change from a decade ago. Back in 2015, fossil fuels still attracted more money than clean energy. In 2016, perhaps galvanized by the Paris Agreement signed the very same year, investors channeled more funding toward clean energy than toward fossil fuels.
Investors haven’t looked back since — and all forms of clean energy have taken off as a result, led by China, the world’s most prominent “electrostate.” Over the last decade, wind and solar have grown from making up just over 4% of global electricity production to accounting for 15% as of last year. Solar in particular has increased eightfold over that time; no energy category will attract more money than photovoltaics this year, per IEA.
This widening gap suggests some progress in the global effort to move away from fossil fuels. Investment is a leading indicator of actual, physical things — new solar plants, wind turbines, power lines, and more — being built. The trillions invested in this year, last year, and so on, will translate to record-breaking amounts of clean-energy installations in the years to come.
But despite the promise, IEA says current investment levels are not enough to meet global pledges made in late 2023 to boost renewables and energy efficiency. Investment in renewables needs to double. Energy efficiency, a sector experts have long viewed as underfunded, needs investment to almost triple. So does electrification.
Meanwhile, fossil fuel investment has remained stubbornly high even as it loses ground to clean energy. Only in 2020, during the COVID-19 pandemic, did the world spend less than $1 trillion on coal, gas, and oil.
That mirrors a concerning trend within the global power sector: Renewables are growing at a record-breaking pace, faster than many thought possible, and yet emissions are still rising as countries simply use more electricity, burning more fossil fuels as a result. This dynamic will not solve climate change. In order for the world to decarbonize, investment in clean energy needs to be high enough for it to displace — and drive down — fossil-fuel use.
ENFIELD, N.C. — On a sweltering Saturday last month, climate activists, local elected leaders, and their families and friends gathered around a boarded-up home on the main strip of Enfield, North Carolina, donning sun hats and wielding garden tools.
To a hip-hop soundtrack blasting loud enough that the entire town of 2,000 could probably hear, the crew labored in the 90-degree heat to plant perennials, lay patio stones, and generally pretty-up the small yard in front of the nearly 1,800-square-foot bungalow.
“We are in beautification mode outside,” said Enfield Mayor Mondale Robinson, “because inside we’re at a standstill for the lack of funds right now.”
The century-old home will ultimately serve as a “weatherization hub” for Enfield, where many households hover near the poverty line but electricity bills regularly top $400. Powered by solar panels and a backup battery, the hub will host do-it-yourself energy-efficiency workshops and provide a stable internet connection for remote workers, Robinson said.
The hub is just one piece of a multifaceted clean energy vision charted by Robinson, together with other town leaders and climate nonprofits. Still recovering from a debilitating car accident from May, the wheelchair-bound mayor served as DJ, grounds supervisor, and occasional worker — to the certain chagrin of his doctor.
The scene was a fitting metaphor for where Robinson and his colleagues find themselves at the moment: hobbled by the ferocity with which the federal government has targeted clean energy and equity initiatives, but determined to press on no matter what.
“So, we stand in this heat,” Robinson said, “the same heat my grandfather and his grandfather labored in for free for somebody else. We do it for free right now, but not for somebody else — for what’s to come. It’s folk out there that don’t know that this building is for them. In spite of our federal government, in spite of, sometimes, our state government, we still stand up. We still try.”
The event last month was also about community. Climate leaders who’d worked together for years and others who’d just met took breaks in the shade to connect and reconnect.
“It’s all about people,” said Helen Whiteley, an adjunct professor at Duke University’s Design Climate program who is supporting the town in its clean energy ambitions. “When you find people who believe things that are similar, you hold onto them and try to collaborate with them.”
One of the poorest and Blackest towns in America, Enfield could have a bright future, leaders here believe: The Halifax County community could supply its own solar power, upgrade its housing stock to be more energy efficient, and create gathering places powered by clean energy.
But when Robinson and his allies were first laying their plans, the prospects for assistance from the federal government were far rosier than they are today.
The bipartisan infrastructure law and the Inflation Reduction Act — both signed into law by former President Joe Biden — promised aid for clean energy and for historically disadvantaged communities.
Federal programs spurred by these laws could have potentially funded a replacement of the town’s dilapidated and outdated grid. Tax credits might have offset at least 40% of the cost of a new solar farm and battery that would supply electricity to businesses and residences, stabilizing household electric bills. A planned resilience center on the town’s fairground, intended as a gathering place during weather disasters and as an incubator for sustainable businesses, could have also benefited.
But in six short months, President Donald Trump and the Republican-controlled Congress have shut down or imperiled many of these initiatives. The Office of Clean Energy Demonstrations, an initiative established by the 2021 infrastructure law that Enfield hoped to tap for funding, is kaput for the time being.
“That was the best one,” Nick Jimenez, senior attorney with the Southern Environmental Law Center, said with a sigh. “That could have done the grid plus solar.”
After Trump signed the budget bill into law July 4 and issued a subsequent executive order July 7, tax incentives are now sharply curtailed. Credits for home rooftop solar and energy-efficiency upgrades will dry up at year’s end.
“A fair number of our colleagues in Washington see just ink on paper,” said Rep. Rodney Pierce, a Democrat who represents Halifax County in the North Carolina House. “It’s not just letters and numbers. These are people. These are families, communities. It’s disappointing,” he said at the gathering last month.
At the same time, Pierce acknowledged, skepticism about clean energy has grown among state politicians. A bill to ratchet down local tax incentives for solar farms has cleared two committees in the state House. Another measure would eliminate an interim target for utility Duke Energy to curb its carbon emissions, removing a key driver for clean energy. The GOP-run General Assembly could yet enact the legislation, Senate Bill 266, by overriding the veto of Gov. Josh Stein, a Democrat.
Both Black men in their mid-40s, Pierce and Robinson attended rival public high schools in the county, the state legislator said. Both are quick to link the quest for clean energy to the ongoing struggle for civil rights and economic justice.
“Those of us who grew up in persistently impoverished counties like Halifax — we can ill afford to be reticent to encouraging and exploring other sources of energy,” said Pierce, who voted against SB 266. “That’s why I’m out here. I count Mayor Robinson as a friend.”
To be sure, some remnants of Biden-era climate funding have slipped through the grasp of Trump and his allies in the GOP.
A multimillion-dollar grant for grid improvements deployed to the state thanks to the infrastructure law could yet help Enfield upgrade its aging substation and low-capacity power lines. “That hasn’t been targeted yet,” Jimenez said of the program.
Funding for EnergizeNC, meant to help develop rooftop and community solar in low-income areas like Enfield, is also intact. So are rebates designed to help households buy more efficient appliances and perform other upgrades to save energy. Indeed, because of its atrocious energy burden, Halifax County was among the first two counties to access the Energy Saver North Carolina program when it launched early this year.
That’s why Enfield leaders and their allies are focused on affordable, energy-efficient housing and the weatherization hub, for now.
“This was always going to be about what we could get from philanthropy and what the mayor could marshal up from his resources,” said William Munn, regional director of the Carolinas for advocacy group Vote Solar. “We think now, given the federal situation, this is probably the most likely thing we can get done as quickly as possible.”
Robinson bought the home on South McDaniel Street earlier this year for $32,500. For another $100,000 or so, Munn believes it can be upfitted and ready to serve.
“The sooner the money comes in, the faster it gets done,” he said. “We believe this is a small enough project that, once this is done, we can market it and keep pitching it. We want to send the message that this is just the beginning.”
Robinson has high hopes for the hub’s completion. “We’re at a point now where we need people to start seeing that this thing is not 12 years away, two years away, or even a year away,” he said. “With a little investment, this thing could be done by the end of the summer.”
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