Cancellations nearly matched factory announcements last year: Firms unveiled a total of $24.1 billion in new cleantech manufacturing projects, but scrapped $22.7 billion worth.
It’s a dramatic reversal. The Biden-era Inflation Reduction Act had spurred well over $100 billion in cleantech manufacturing commitments through incentives for both factories and their customers, be they families in the market for an EV or energy developers building a solar megaproject. The ensuing boom in cleantech factory construction created thousands of jobs and caused overall manufacturing investment to soar. Most of the investment was planned for areas represented by Republicans in Congress.
But last year, the Trump administration put strict stipulations on incentives for factories and repealed many of the tax credits that helped generate demand for American-made cleantech. It also showed an astonishing hostility to clean energy projects — namely offshore wind — and cast a general cloak of uncertainty over the entire economy.
To be fair, other potential factors are at play.
Some of the slowdown in cleantech factory investment could simply be the market maturing. Plenty of projects announced right after the Inflation Reduction Act might already be online, or close to it. Or it could be the result of the gravitational pull of the data center boom, which is attracting gobsmacking amounts of capital that could have otherwise financed more cleantech factories.
But either way, as the new data shows, the Trump administration has weakened the case for investing in expensive projects tied to clean energy. I’m willing to bet that the consequence will be more factory cancellations — and less investment — over this year, too.
