Clean Energy Investment Faces Half-Trillion Dollar Hit
- A Rhodium Group report says the Trump administration’s sharp policy pivot could more than halve the U.S. decarbonization pace.
- The “One Big Beautiful Bill Act” is projected to cut new clean-power build by 53–59% over the next decade and put over $500 billion of clean-energy and transport investment at risk.
- WoodMac/ACP report wind turbine orders down ~50% in H1 2025 and PPAs slumping.
The Trump Administration’s openly hostile policy toward wind, solar, and electric vehicles is setting the stage for much slower emissions reductions than previously anticipated, a new report says.
The U-turn in U.S. energy policies under President Donald Trump could more than halve the pace of America’s decarbonization, research provider Rhodium Group said in its annual Taking Stock 2025 analysis this week.
“Openly hostile to wind, solar, and electric vehicles”
Solar and wind installations and EV uptake could nosedive with the expiry of subsidies earlier than planned and plans to dismantle the so-called endangerment finding. This finding, from 2009, represents the U.S. federal government’s formal conclusion that greenhouse gases harm the public and cause climate change. This finding has acted as the legal foundation for many U.S. laws and regulations aimed at curbing greenhouse gas emissions.
As part of the Trump Administration’s rollback of climate laws and provisions, U.S. Environmental Protection Agency (EPA) Administrator Lee Zeldin has proposed to rescind the 2009 Endangerment Finding—a move welcomed by Energy Secretary Chris Wright as “a monumental step toward returning to commonsense policies that expand access to affordable, reliable, secure energy and improve quality of life for all Americans.”
Related: EU Court Upholds Green Label for Gas and Nuclear Energy
For the Trump Administration, reliable and affordable energy means more fossil fuels and nuclear power generation, at the expense of unreliable, weather-dependent, and heavily-subsidized (until now) wind and solar energy and EVs.
“The first seven months of the second Trump administration and 119th Congress have seen the most abrupt shift in energy and climate policy in recent memory,” Rhodium Group said in its report.
“After the Biden administration adopted meaningful policies to drive decarbonization, Congress and the White House are now enacting a policy regime that is openly hostile to wind, solar, and electric vehicles and seeks to promote increased fossil fuel production and use.”
The Chilling Effect in Solar and Wind
Taking Stock, Rhodium Group’s annual outlook of future emissions under current policy, found the U.S. is on track to reduce greenhouse gas emissions by 26-41% in 2040 relative to 2005 levels. Emissions levels will decline by 26-35% in 2035, considerably lower than the estimate in the 2024 report, which showed a steeper drop of 38-56% by 2035 compared to 2005.
The high emissions scenario, the most pessimistic of the three scenarios examined in the 2025 report, suggests the pace of decarbonization in the U.S. would more than halve through 2040, with annual average emissions reductions of just 0.4% from 2025 through 2040 compared to 1.1% from 2005 through 2024. In the mid and low emissions scenarios, the pace of decarbonization accelerates instead, with annual average reductions of 1.4% and 1.9% through 2040, respectively, representing a 22% and 70% acceleration, compared with the pace of the last two decades.
“Despite the volume of policymaking from the executive branch, the single largest climate and energy policy action came in the federal legislative realm with passage of the fiscal year 2025 budget reconciliation bill, dubbed the ‘One Big Beautiful Bill Act,’” Rhodium Group said.
The OBBBA is expected to cut the build-out of new clean power-generating capacity by 53-59% over the next decade, according to the research provider.
Overall, the Act puts more than half a trillion dollars of clean energy and transportation investment at risk of cancellation, Rhodium Group has estimated.
“It also puts new economic pressure on operating facilities that manufacture clean energy technology—tied to nearly $150 billion of investment—given greatly reduced domestic demand for these products,” it added.
The total impact on America’s clean energy could be even bigger, depending on how executive actions shape the law’s implementation, Rhodium Group says.
For the solar industry, OBBBA will have a muted impact in the near term as developers rush to complete projects to qualify for tax incentives by 2027, Wood Mackenzie said earlier this month. However, the longer-term outlook has now worsened due to new barriers to permitting and penalties for reliance on China-based solar manufacturers.
The latest U.S. Solar Market Insight Q3 by the Solar Energy Industries Association (SEIA) and Wood Mackenzie warns that these policies put the United States at risk of losing 44 gigawatts (GW) of solar deployment by 2030, an 18% decline.
The report finds that 77% of all solar capacity installed this year has been built in states won by President Trump, including 8 of the top 10 states for new solar installations: Texas, Indiana, Arizona, Florida, Ohio, Missouri, Kentucky, and Arkansas.
“Instead of unleashing this American economic engine, the Trump administration is deliberately stifling investment, which is raising energy costs for families and businesses, and jeopardizing the reliability of our electric grid,” said Abigail Ross Hopper, SEIA president and CEO.
According to Michelle Davis, head of solar research at Wood Mackenzie, “Further uncertainty from federal policy actions is making the business environment for the solar industry incredibly challenging.”
Wind energy faces significant hurdles, too.
While wind installations jumped in the first quarter of the year, total turbine orders for the first half of 2025 plunged by 50%, to the lowest level since 2020, the U.S. Wind Energy Monitor report by Wood Mackenzie and the American Clean Power Association (ACP) showed.
An ACP market report found that U.S. clean power development pipeline showed virtually no growth, as solar installations declined by 23% in the first half of 2025, and Power Purchase Agreements (PPAs) plummeted. These are “early indicators of federal policy attacks and fluctuating trade policy undermining American energy security and economic growth,” the association said.
“The uncertainty created by new bureaucratic delays and unclear demands is having a chilling effect on the pipeline for future energy projects, stalling growth precisely when our nation needs more energy to power a growing economy,” ACP CEO Jason Grumet noted.
By Tsvetana Paraskova for Oilprice.com
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