Trump's War on Renewables Shakes US Wind and Solar Industry

Trump's Attack on Wind and Solar Power

President Donald Trump has launched a significant campaign against wind and solar power, aiming to reshape the U.S. energy landscape and reverse the environmental policies of his predecessor. Since returning to office in January, his administration has targeted projects on federal lands and oceans, halting work on wind farms, revoking permits, and making it more challenging for new renewable energy developments to gain approval. Additionally, he has weakened the economic viability of wind and solar projects by pushing legislation through Congress that phases out key tax breaks and tightening access to these incentives.

This approach has created a crisis within the U.S. clean energy industry, putting billions of dollars of investment at risk and threatening thousands of jobs. This marks a sharp contrast from just three years ago when the sector celebrated the passage of the Inflation Reduction Act under President Joe Biden, which was hailed as the most significant climate legislation in U.S. history.

Why Does Trump Dislike Renewables?

Trump has criticized solar and wind power as unreliable and expensive, advocating for increased use of fossil fuels such as natural gas and coal, as well as nuclear energy. He has also expressed concerns about the visual impact of renewable installations, calling solar projects “big ugly patches of black plastic that come from China” and criticizing their effect on farmland. He has long been a vocal opponent of wind turbines, falsely claiming they cause cancer and referring to them as bird-killing eyesores.

Before his first presidential term, Trump lost a legal challenge in the UK to prevent an offshore wind project from being built near a golf course he owns in Aberdeen, Scotland. He once stated, “Windmills are a disgrace,” claiming they are inefficient and the most expensive form of energy.

How Has Trump Sought to Curb Wind and Solar Developments?

The Trump administration has used its control over millions of acres of federal land and waters, where developers need government authorization to build. While these areas are being made easier to explore for the oil and gas industry, the government is imposing standards that effectively prevent new renewable energy installations. On his first day back in office, Trump froze permitting for all wind projects on federal land and oceans, and indefinitely halted the sale of new leases for offshore wind development.

He directed the Interior Department to review the necessity of terminating or amending existing wind energy leases and to identify any legal bases for such removal. Since then, several wind projects have been affected, including the Revolution Wind development off the coast of Rhode Island. The government issued an order halting construction of the project, citing national security concerns, which sent shares of developer Orsted A/S to record lows.

Beyond Federal Land and Waters

Only 4% of operational U.S. renewables capacity is located on federal land. While the government doesn’t have direct control over clean energy developments on private property, many of those projects still require federal approvals that are being held up. Additionally, the Trump administration has worked to make the economics of wind and solar less attractive.

Trump has labeled efforts to combat climate change as the “Green New Scam” and vowed to eliminate subsidies for these activities. The tax-and-spending law he helped pass phases out tax credits for wind and solar projects years before they were due to expire. The Treasury Department has also issued guidance making it harder for developments to qualify for these incentives.

Impact on the U.S. Clean Energy Industry

The industry had been gaining momentum, with solar and wind power almost tripling their share of U.S. electricity generation over the past decade. However, it now faces significant challenges. Billions of dollars of new factories and clean energy projects have been canceled, delayed, or scaled back since the start of the year. Clean energy advocacy group E2 estimates that $22 billion worth of projects were scrapped or downsized from January to June, with more than half of the investment lost in congressional districts represented by Republicans.

Smaller and medium-sized companies are likely to be hit hardest by the instability, while larger solar developers remain cautiously optimistic. The nascent U.S. offshore wind industry is particularly vulnerable, as it was just beginning to take off before Trump returned to the White House.

Effects on Energy Prices

Electricity prices have risen at more than twice the rate of overall inflation in the past year, remaining at record highs. While the Trump administration claims that adding wind and solar to the grid has increased costs, data shows that spending on power lines and poles has been the main driver of utility bill hikes. Higher electricity costs reflect tight supply as aging coal- and gas-fired plants retire and power consumption rises after years of relatively low growth.

The phaseout of wind and solar incentives under Trump’s tax-and-spending law could raise average U.S. household energy bills by $78 to $192 in 2035, according to the Rhodium Group.

Outlook for U.S. Renewables

Despite the challenges, the U.S. clean energy buildout is expected to continue, albeit more slowly. Solar and batteries are faster to deploy than Trump’s preferred energy sources. There is currently a multiyear manufacturing backlog for the combined-cycle turbines used in gas plants, while new nuclear capacity is many years away.

Onshore wind and solar are expected to be cost-competitive even without subsidies, according to BloombergNEF. Blue states like California and New York are still pushing to expand their clean power fleets. However, the outlook for the sector has certainly dimmed, with revised estimates for new wind, solar, and energy storage additions in the U.S. through 2035 being 26% lower than previously projected.