Clean Energy Faces Turbulent Year Amid Policy Shifts and Market Forces

There were some highs amid a lot of lows in a roller coaster year for clean energy as President Donald Trump worked to boost polluting fuels while blocking wind and solar development, according to dozens of energy developers, experts and politicians.

Surveyed by The Associated Press, many described 2025 as turbulent and challenging for clean energy, though there was progress as projects connected to the electric grid. They emphasized that clean energy must continue to grow to meet skyrocketing demand for electricity to power data centers and to lower Americans’ utility bills.

“There was a cooldown effect this year,” said Jorge Vargas, cofounder and CEO of Aspen Power. “Having said that, we are a resilient industry.”

The year began with ample federal subsidies for clean energy technologies, a growing number of U.S.-based companies making parts and materials for projects, and substantial demand from states and corporations, according to Tom Harper, partner at global consultant Baringa.

But it ends with subsidies stripped back, a weakened supply chain, higher costs from tariffs, and some customers questioning their commitment to clean energy. Harper described the year as “paradigm shifting.”

Policy Whiplash Reshapes Industry Landscape

Much of clean energy’s fate in 2025 was driven by President Trump’s return to the White House. Trump called wind and solar power “the scam of the century” and vowed not to approve new projects. The federal government subsequently canceled grants for hundreds of projects.

The most consequential policy shift came when Republicans muscled a tax and spending cut bill through Congress in July that dramatically rolled back tax breaks for clean energy. The legislation reversed or steeply curtailed clean energy programs established through the Democrats’ flagship climate and health care bill in 2022.

“Companies can’t make billion-dollar investments with so much policy uncertainty,” said American Clean Power Association CEO Jason Grumet.

Many energy executives identified this as the most significant change of the year. The bill reshaped the economics of clean energy projects, drove a rush to start construction before incentives expire, and forced developers to reassess their strategies for acquiring parts and materials.

“Consequently, greenhouse gas emissions will fall at a much lower rate than previously projected in the U.S.,” said Brian Murray, director of the Nicholas Institute for Energy, Environment and Sustainability at Duke University.

Solar and Battery Storage Continue to Boom

Despite the policy headwinds, solar and battery storage accounted for 85% of the new power added to the grid in the first nine months of the Trump administration, according to Wood Mackenzie research.

Industry experts attribute this resilience to strong economics, high demand, and the speed with which these technologies can be deployed. Mike Hall, CEO of Anza Renewables, noted that these factors continue to drive growth regardless of political climate.

Solar energy company Sol Systems reported a record year as it brought its largest utility-scale project online and expanded its business. Similarly, energy storage systems company CMBlu Energy indicated that storage has clearly emerged as a winner, transitioning from optional to essential infrastructure.

“Trump’s effort to manipulate government regulation to harm clean energy just isn’t enough to offset the natural advantages that clean energy has,” Democratic U.S. Sen. Sheldon Whitehouse said.

The Solar Energy Industries Association emphasized that regardless of Washington policies, solar and storage will continue growing as the backbone of the nation’s energy future.

Nuclear and Geothermal See Positive Momentum

Both Democrats and Republicans have supported investing to keep nuclear reactors online, restart previously closed reactors, and deploy new, advanced reactor designs. Nuclear power, though not typically labeled as green energy like other renewables, is a carbon-free source of electricity.

“Who had ‘restart Three Mile Island’ on their 2025 Bingo card?” quipped Baringa partner David Shepheard. The Pennsylvania plant, site of the nation’s worst commercial nuclear power accident in 1979, is being considered for restart with the Energy Department loaning $1 billion to help finance the project.

The nuclear industry appears to be gaining momentum as small, modular reactor technology begins to mature. Benton Arnett, a senior director at the Nuclear Energy Institute, said that as demand for clean, reliable power intensifies, “we will look back on the actions being taken now as laying the foundation.”

The Trump administration has also shown support for geothermal energy, with the tax bill largely preserving geothermal tax credits. The Geothermal Rising association reported that technologies continue to mature and produce, making 2025 a breakthrough year for the sector.

Offshore Wind Faces Severe Setbacks

Momentum for offshore wind in the United States came to a grinding halt just as the industry was starting to gain traction. The Trump administration stopped construction on major offshore wind farms, revoked wind energy permits, paused permitting processes, canceled plans to use large areas of federal waters for new offshore wind development, and halted federal funding for offshore wind projects.

“That has decimated the projects, developers and tech innovators, and no one in wind is raising or spending capital,” said Eric Fischgrund, founder and CEO at FischTank PR. Despite these challenges, Fischgrund remains optimistic because the global transition to cleaner energy continues.

Looking Ahead to 2026

As electricity demand continues to grow from data centers and other sources, experts suggest that an energy strategy with a diverse mix of sources is the only path forward. Former Democratic Sen. Mary Landrieu, now with Natural Allies for a Clean Energy Future, emphasized that promoting or punishing specific energy technologies on ideological grounds is unsustainable.

The market is expected to ensure that most new electricity generation comes from renewable sources, particularly solar and battery storage, which can add power to the grid quickly and affordably. Hillary Bright, executive director of Turn Forward, believes offshore wind will still play an important role despite current setbacks, as the technology is both ready and needed.

“The fundamentals are unchanged,” said Ed Gunn, Lunar Energy’s vice president for revenue. “There is massive value in clean energy.”