The second Trump government is a tough approach to policy reform, not least with energy. The American president has expressed support for an “all the above approach” while he slogan “Drill Baby, Drill” and calls the end of the “EV [electric vehicle] mandate.”
Trump is clear about his preference for fossil fuels and aversion to wind energy and EVs. But where is he on solar energy?
The unleashed American energy -Executive Order of the president released limitations on oil and rare earth -mineral extraction. The new administration has also tried to remove the exemptions from the state of emissions that limit the sale of conventional vehicles and the elimination of “unfair subsidies and other poorly conceived, imposed market renovations” that prefer EVs. There is no federal mandate for EVs. The order also requires looser energy -efficiency -requirements for devices, with reference to product competition and consumer choice.
In a separate order, Trump paused the sale of offshore wind energy in federal waters and continued approvals, permits and loans for wind energy.
Industrial growth
The solar industry grew by 128% during Trump’s first term, from 2016 to 2020, according to the Solar Energy Industries Association (SEIA). It was the largest source of capacity for generating electricity generation that was added to the American grid in 2024. The US Energy Information Administration (EIA) reports Solar that more than 64% of the new American grid-bound generation capacity has been added from January to September 2024, prior to natural gas.
“Solar, now an industry of $ 60 billion, adds more new capacity to the American net than any other fuel source in the midst of the biggest increase in demand for electricity since the Second World War,” said Seia President and CEO Abigail Ross Hopper.
Market information provider S&P Global Commodity Insights expects investments in clean energy for the first time this year to surpass fossil fuels with $ 670 billion in generation and green hydrogen for renewable energy – plus fossil fuels that make carbon collection and storage possible.
“Solar PV is expected to represent half of all Cleantech investments and two-thirds of the installed Megawatt,” said Edurne Zoco, executive director for Clean Energy Technology at S&P.
Cloud
Despite such optimism, the Trump government has imposed barriers for solar energy. The president withdrew the nation from the Paris climate agreement. The and more friendly regulation of fossil fuels can influence the PV -business case versus oil and gas and pause banks and investors.
The unleashed American energy -executive action stopped subsidies, loans and Othemichr financial support from the Inflative reduction ACT (IRA) and the Infrastructure Investment and Jobs Act.
The Rhodium Group of the American treasury and the market for market information, estimates that more than $ 380 billion in private investments has been announced since the IRA was assumed. These investments include $ 114 billion for solar energy, $ 77 billion for battery production and $ 66 billion for energy storage projects. The Ministry of Treasury said that the investment will support 1.5 million jobs in the coming decade, based on analysis by the Labor Energy Partnership.
The freezing of all federal IRA payments ordered by the executive order caused a whirlwind of uncertainty, because it remains unclear which aspects of IRA finance will be stopped. Since then, large manufacturers have announced cancellations or breaks for large factory investments, including the most important energies of India, which stopped 1 GW production plans from the United States from the United States; Kore Power, which has planned a lithium ion battery in Arizona; And Freyr Battery, who plants an investment of $ 2.6 billion in a battery factory in Georgia that would create an estimated 720 new jobs.
Accounting and consultancy Baker Tilly said that it “remains unclear” whether the break covers all potential financing, such as IRA direct wage provisions, or that it only applies to subsidies, loans and contracts that are managed at the federal level.
At the time of writing, the debate about the federal payment was underway. Judge of the American district Loren Alikhan placed a street ban on the payment freezing and did not order the American executive power to “pause, freeze, to hinder, to block, cancel or terminate the American executive. Federal Judge John McConnell Jr. Order the Trump administration “to immediately recover withheld funds, including those federal funds assigned to the Inflation Reduction Act and the Infrastructure Improvement and Jobs Act.”
Representatives of the White House said they had “good faith, diligent efforts to satisfy” with the order to resume federal financing. Justice McConnell said that the government “had wrongly continued to freeze the federal funds and refused to resume the payment of the assigned federal funds.” It is still to be seen whether the White House is contemptuous for orders from the federal court.
It also remains unclear what will happen to the IRA and other federal clean energy funds. The payment order of the administration called for a 90 -day stay, from the institution on January 20, to revise all processes, policy measures and programs with regard to subsidies, loans, contracts and other financial payment. Agencies must assess whether such support is in accordance with the newly established energy goals of the administration, according to the Order.
Those energy goals were set out in section 2 of the document “Untlieen from American Energy”. They include expanding energy exploration on federal country and water, prioritizing the production of rare earth metals, making the federal overruming of energy goals of the state, eliminating what the Order described as the “electric vehicle mandate”, and promoting “consumer choice” in devices and vehicles.
Budget tuning
Although solar energy is not directly in sight of that executive order, the uncertainty about the fate of Core IRA financing remains such as the 30% investment tax credit for eligible projects, the production tax credit and extra tax credit “adders” such as the 10% energy community community. Much of the uncertainty could be resolved at the end of 2025 under the federal budget -kissing process.
A branch letter from Roth Capital Partners suggested that all IRA funds could end five years earlier than expected, instead of rejecting from 2032 in 2027. The note suggested that a Republican majority congress could follow a “front hammer” approach, whereby the fundamental industrial policy was crushed.
However, the IRA was specifically manufactured to be resilient for a Republican government, which has a majority of the Scheerder-Dunne Congress. About 80% of the IRA funds go to projects in Republican controlled districts, which leads to thousands of jobs and billions of investments and making the funds more “sticker” for a congress whose voters want to benefit.
In August 2024, about 18 members of the American House of Representatives asked the congress to preserve IRA funds. “A complete withdrawal would create a worst-case scenario in which we would have issued billions of taxpayers dollars and have also received nothing,” said a letter to Huisspeaker Mike Johnson.
Now at least eight Republican House -members have expressed support for maintaining IRA tax credits, with reference to job growth. Various members of the Republican House have officially testimrized the Ways and Means committee.
“I ask you to be careful when you want to tackle the provisions of the IRA that have stimulated the snow of the future of cars, who created billions of dollars in American investments and thousands of jobs,” said Michigan representative John James. “The majority of the IRA is harmful policy, we should not neglect the sector -wide energy tax that manufacturers and job makers trust in my district. We want to lose too many American jobs.”
The representative of Iowa, Mariannette Miller-Meks, emphasized five tax credits that she described as ‘transforming investments in American energy’. She ordered to retain, credit of clean fuel production 45z, advanced production production credit 45x, carbon oxide -sectic reclamation credit 45q and the 45y and 48th clean energy production and investment tax credits.
Such republican support for tax credits for clean energy could well predict for the most critical funds within the IRA.
Raising rates
In the midst of possible cutbacks on IRA financing, the Trump administration has also forced various new rates that are expected to increase the solar costs and delay the energy transition. Imported solar energy sources, including polysilicon, waffles and cells from China, are now subject to 60% rates under section 301 of the 1974 trade act.
Rates of 10% on “energy sources” from Mexico and Canada, which were paused and are assessed from mid -February, include polys silicon, solar cells and waffles with solar plots, but do not include completed solar modules.
A rate of 25% is also placed on imported steel and aluminum from most global providers. Aluminum is used in the framing of the solar panel and represents approximately 14% of the costs of a finished panel, and is also used in the racks on the roof. Steel is used in structures mounted on the ground for solar support.
PV Dominance
Despite the fact that all regulatory clouds are thrown through the new administration on solar energy, optimism remains. Bloombergnef expects the empty costs of electricity (LCOE) of solar projects with a fixed axis on utilities on utilities year on an annual basis will fall to $ 35/MWH. It predicts that the LCOe will continue to fall to $ 25/m by 2035
Bloombergnef has also reported that global investments in clean energy technology achieved a record of $ 2.1 trillion in 2024. That represented 11% growth from 2023 and is more than double the figure that was registered in 2020.
“New sun plants, even without subsidies, are at the moving distance of new American gas factories,” said a report from the analyst. “This opens the chance that solar energy will become even more compelling in the coming years, especially if the US starts exporting the liquid natural gas and exposes its protected gas market to global price competition.”
Matthias Kimmel, head of Energie -Economy at Bloomberg Nef, summarized by noting that the “trend in cost reductions is so strong that no one, even President Trump, will not be able to stop.”
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