Following the results of the November 2024 election, the clean energy sector braced for a dramatic shift—and it has come quickly. President Donald Trump has moved fast to roll back federal support for wind, solar, electric vehicles (EVs), and other green technologies, ending years of generous government subsidies.
Republican lawmakers are now working to cut billions of dollars in federal funding that has fueled growth in renewable energy, battery production, and EV development. These subsidies helped solar and wind companies thrive, supported domestic manufacturing investments, and softened the financial blow of slow EV sales.
Clean energy advocates are sounding the alarm. “While American businesses are demanding more energy to compete against our adversaries, and consumers are turning to clean energy to hedge against rising electricity prices, these proposals will undermine our nation’s efforts to achieve President Trump’s American energy dominance agenda,” said the president of the Solar Energy Industries Association in response to the House Energy and Commerce Committee’s recent budget proposal.
Supporters of renewables argue that the move threatens billions in private investment and thousands of jobs. Since the passage of the Inflation Reduction Act and Chips and Science Act in 2022, developers have launched $145 billion worth of solar, wind, and battery storage projects. Manufacturers have invested $73 billion in nearly 100 new factories, according to The Wall Street Journal.
However, critics question the sustainability of this growth without government support. They point out that 40% of projects announced after the Inflation Reduction Act have been delayed or shelved, despite the significant incentives offered. These figures suggest that the industry boom may have relied heavily on subsidies rather than market viability.
State and local governments are also becoming more cautious. Some are tightening permitting rules and slowing down clean energy development, reflecting growing pushback from communities concerned about the impact of large-scale wind and solar installations.
Despite rapid expansion, the clean energy industry faces real challenges. The high cost of building and maintaining wind and solar projects has risen with inflation. Battery storage remains expensive, and renewable power sources still struggle to provide reliable electricity on demand. Overproduction during low-demand periods has also led to negative pricing in some markets. In densely built areas, wind farms can even reduce each other’s efficiency—a phenomenon known as “self-cannibalization.”
Stock market losses in renewable energy last year signaled the limits of even subsidized success. The decline raised concerns about the long-term financial sustainability of companies in the sector.
During the Biden administration, wind and solar grew rapidly, backed by an estimated $400 billion in federal funding. But with the political pendulum swinging, these industries now face a new reality: they must compete in a more level market with fewer financial lifelines.
For some, this is a moment of reckoning. If the clean energy sector is as robust as supporters claim, it may prove its ability to survive—and thrive—without government crutches.
Related Topics:
- Italian Industry Urges Action on Soaring Energy Costs
- Saudi Aramco Considers Asset Sales to Fund Global Expansion Amid Profit Drop
- Taiwan to Hold August Vote on Restarting Last Nuclear Reactor