Trump’s clean energy cuts hobble solar and wind build-out

In Nevada, the desert blooms with solar panels. The state generates just over one-third of its electricity from sunlight, and plans to add enough solar capacity over the next five years to power nearly 2mn homes.

But the state’s solar build-out may now be under threat, after what would have been the largest solar farm in North America — Esmeralda 7 — had its environmental review cancelled by the US interior department last month.

While the project’s developers can reapply for approval, critics say it is the latest move by the government to hobble the US green energy transition, creating uncertainty for developers, investors and consumers.

Since President Donald Trump’s second term started in January, he has cut incentives for renewables under the Joe Biden-era Inflation Reduction Act. The administration has also disrupted high-profile wind and solar projects, with interior secretary Doug Burgum saying these “massive, unreliable, intermittent energy projects hold America back from achieving energy dominance”.

The interior department’s actions are likely to cause an investment freeze and send deployments of renewable projects plummeting. Data gathered by BloombergNEF shows investments in US renewables fell by 36 per cent in the first half of 2025. Meanwhile, according to Rhodium Group, Trump’s so-called One Big Beautiful tax and spending bill — which cut many of the sector’s tax credits — will shrink the build-out of new clean power generating capacity by 53-59 per cent from 2025 to 2035.

“Whether or not you agreed with everything the Inflation Reduction Act did, it gave you policy stability,” says Reagan Farr, chief executive of solar developer Silicon Ranch. “With the One Big Beautiful Bill you’ve now tied energy policy to whichever party is in power.”

In the short term, a flurry of activity is under way in the sector. To catch the tail-end of the tax credits, new projects must start construction before July 2026 and be placed in service after four years. This has led to developers rushing to secure equipment, start building and sign deals to sell their power to utilities, corporations and public sector clients.

“There’s a huge rush to secure the tax credits and I wouldn’t be surprised to see a huge wave of deal announcements,” says Luca Pedretti, chief operating officer of Pexapark, a renewables marketplace platform.

But experts warn that after this sharp increase, development will slump and prices will increase. While larger, more established developers with shovel-ready projects will be able to secure the credits, smaller developers will struggle.

“Projects on the margins might not necessarily collapse but will need restructuring,” says Pol Lezcano, director of energy and renewables at CBRE. “And smaller developers will find it much harder to raise finance and find buyers.”

Trump’s trade war is also affecting some developers’ ability to build. Tariffs on key components such as steel, aluminium and copper, as well as country-specific tariffs, are driving up costs.

According to LevelTen Energy — a renewable energy marketplace — wind power purchase agreement (PPA) prices rose by 14 per cent year on year and solar PPA prices by 6 per cent year on year.

Both factors are expected to lead to higher electricity prices in the future.

“Power purchase agreement prices are a canary in the coal mine for what we might see downstream in wholesale and retail electricity prices,” says Rob Collier, energy marketplace senior vice-president at LevelTen. “The big risk is tariffs.”

Developers may also see further turbulence for major projects. As well as halting Esmeralda 7, which was backed by renewables company NextEra Energy, the interior department also stopped — and then restarted — work on two wind farms: Equinor’s Empire Wind off the coast of New York and Ørsted’s Revolution Wind off Rhode Island.

Projects on federal lands must now undergo an elevated review process and be rubber-stamped by Burgum’s office. However, since only 5 to 10 per cent of projects are on federal lands, the more important battles will be left to the states, says Antonio Cammisecra, chief executive of ContourGlobal, an independent power producer.

According to E2, a clean energy business group, 85 per cent of Inflation Reduction Act investments are in Republican-held congressional districts. But whether or not states decide to block a project is complicated, since they bring benefits in the form of employment and tax income.

Trump has also prompted companies to pare back their green targets. In recent earnings calls, executives from BP, Chevron, ExxonMobil, Shell and TotalEnergies emphasised their shift towards finding new oil and gas reserves after earlier moves into renewables. However, experts say that companies are unlikely — and should not — drop their green targets altogether.

“What happens if a new administration comes in and is even more aggressive on the environmental front?,” says Denton Cinquegrana, chief oil analyst at OPIS. “If I was a chief executive, I’d have my eye on our future liabilities as far as the environment is concerned.”

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