The Trump administration’s freeze on Inflation Reduction Act (IRA) funding, alongside the EPA’s termination of over $20 billion in grants from the Greenhouse Gas Reduction Fund (GGRF) – the single largest clean energy programme in the IRA – has sabotaged the future of US clean energy.
A recent report by the Energy Information Administration (EIA) projects that renewables and battery storage will account for 93% of new US power capacity in 2025. But the foundations for this growth rest largely on the policy certainty and financial incentives President Biden’s flagship IRA provided to drive private sector investment. Now, with many clean energy projects on pause, delays will not only slow clean energy deployment but also make it harder for new investors to make a business case. For example, energy storage start-up KORE Power has announced that it is cancelling its plan to build a $1.2 billion battery plant in Arizona that it had been working on for years.
However, the IRA may survive. In January, Verdantix predicted that Republican lawmakers would resist efforts that jeopardize clean energy investments in their states. In line with this, 21 House Republicans have already opposed the cutting of clean energy credits to pay for tax cuts. Further opposition within the GOP could emerge as local economies start to feel the impact of stalled projects.
The long-term risks of such stalled investment are significant. Uncertainty in US climate policy will push capital abroad, benefitting either the EU, where the latest support package for solar manufacturers underscores a strong commitment to the energy transition, or China, which continues to dominate battery manufacturing. If policy instability persists – especially if there is continued resistance within the US – American firms will face a difficult choice: navigate an unpredictable domestic landscape or pursue more predictable opportunities overseas. This dynamic could weaken American competitiveness in clean energy, eroding its position in key industries like solar, wind and energy storage. The coming months will be critical in determining whether the US an sustain its momentum in the clean energy transition or if shifting political winds will slow progress, ceding ground to global competitors.
