Private investment drops as US shifts renewable energy policy

Renewable energy investors slowed the flow of funding into the U.S. in the first half of 2025. While global investment in renewables is at an all-time high, data from Bloomberg NEF shows companies retreating to Europe amid policy uncertainty in the U.S.

Investment in the United States during the first half of 2025 reached nearly $36.5 billion, a decrease of $20.5 billion from the second half of 2024. Meanwhile, global investments in renewable energy increased by 10% to a record high of $386 billion. 

After President Donald Trump took office in January, the renewable energy industry faced uncertainty over the fate of tax credits, the rise of tariffs and potential changes to federal leasing and permitting requirements. Over the past months, the Trump administration has largely removed government support for wind and solar power in favor of coal, gas and nuclear-fueled power plants. Renewable energy advocates say those policies are costing American jobs.

What is driving decreased US investment in renewables?

The amount of money invested in renewable energy so far this year is still high compared to most of the past two decades. But the first half of 2025 saw the lowest renewable energy investment since 2022 — the same year that the U.S. Congress passed lucrative tax incentives through the Inflation Reduction Act.

Meredith Annex, head of clean power at Bloomberg NEF, described a “boom-bust cycle” in the U.S. where “revenue certainty is shifting, particularly when it’s down to large swings in policy.”

Investors expected policy shifts if Trump won, and according to Bloomberg NEF, many companies packed investments into the second half of 2024, looking to ensure that they qualified for tax incentives before Trump took office.

Although it was not signed into law until July, the “One Big, Beautiful Bill” pushed up the deadlines for solar and wind energy projects to begin construction in order to qualify for tax credits. President Trump also recently posted on social media that the U.S. government would stop approving any new wind and solar projects. Although it’s unclear how Trump would accomplish such broad cancellation, his aversion to renewable energy sends a clear signal to the market. 

The Trump administration does have authority for permits on federal land and water. So far, the offshore wind industry is the clearest example of the effects of shifting policy. The government has scrapped plans for offshore wind development. Major companies have backed out of projects that were almost ready to be built, and the Trump administration recently issued a stop-work order on an offshore wind project that had already completed 80% of construction. 

What are the potential consequences?

In an interview with Straight Arrow News, Daniel Kammen, a professor of public policy at the University of California at Berkeley, said, “What’s at stake is U.S. jobs.” 

At the same time that the offshore wind industry is abandoning U.S. projects, offshore wind is the fastest-growing renewable energy sector worldwide, according to the Bloomberg NEF data. 

The rest of the world was already ahead in offshore wind, and Kammen said the 2022 Inflation Reduction Act was a “catch up bill.” But facing more adversarial policy, Kammen said the offshore wind companies “don’t need this drama,” and are retreating to more reliable markets.

Europe appears to be the recipient of most investment dollars that are leaving the U.S., as offshore wind projects across the Atlantic are set to continue. Renewable energy investments in Europe increased by about $30 billion compared to the second half of 2024. Many European countries offer subsidies for offshore wind. 

Supporters of the administration’s approach argue that prioritizing domestic oil, gas and nuclear power will make the electric grid more reliable while creating new jobs. In a press release announcing a review of offshore wind regulations, Interior Secretary Doug Burgum said the administration is pursuing “a results-driven approach that prioritizes reliability.”

Kammen, on the other hand, pointed out that renewable energy is currently the most cost-effective source of electricity, according to some recent studies. He also said that because the time of day the wind blows over the ocean is different from peak daylight hours and landlocked wind turbine production, investing in offshore wind would improve grid reliability. 

“The main victim of this process is U.S. competitiveness,” Kammen said.