Clean Energy Manufacturers Cancel, Downsize $8B In Projects As Environment Turns Hostile

Almost $8B in clean energy manufacturing investments were withdrawn in the first quarter of 2025 as the Trump administration halted incentives and implemented tariffs, according to a clean energy advocacy group. 

The dollar volume of clean energy projects, including large-scale factories, that were canceled, closed or downsized in the first three months of 2025 was three times more than the prior three years combined, nonprofit E2 said in a report this month.

The largest cancellations include Freyr Battery’s nixing of a planned $2.6B factory in Georgia and Kore Power’s cancellation of its $1.2B lithium battery factory in Arizona. 

The pullback follows President Donald Trump pausing disbursement of Inflation Reduction Act funds on his first day in office, Manufacturing Dive reported. The 2022 law gave domestic manufacturers significant tax credits, which led to a surge in clean energy manufacturing.

While IRA funding was temporarily reinstated last week as a federal court considers a lawsuit from six climate groups, Trump has been critical of climate policy initiatives. He also implemented sweeping tariffs early this month that are proving a mixed bag for U.S. manufacturing.

“Clean energy companies still want to invest in America, but uncertainty over Trump administration policies and the future of critical clean energy tax credits are taking a clear toll,” E2 Communications Director Michael Timberlake said in the group’s report.

“If this self-inflicted and unnecessary market uncertainty continues, we’ll almost certainly see more projects paused, more construction halted, and more job opportunities disappear.”

There were 16 projects canceled, closed or downsized in the first quarter of 2025, totaling $7.9B in investments, the report found. In 2022, zero projects were canceled. The following two years each saw nine projects canceled, resulting in $744M of investment lost in 2023 and $1.4B in 2024, according to the report.

The battery/storage sector has been hit with the largest dollar volume of projects canceled or downsized since August 2022 at $5.4B, The solar sector follows at $2.9B, the report states.

Tariffs could drive up costs for both of those products since the U.S. is heavily dependent on imports for things like solar cell components, according to Manufacturing Dive. About 88% of U.S. solar panel shipments were imports in 2022, primarily from Asia, the outlet reported, citing U.S. Energy Information Administration data. 

The state most impacted by cancellations and downsizes since 2022 is Georgia, with $2.9B worth of investment lost, according to E2. California was second, with $2.2B worth of investment lost.

Money for clean energy manufacturing has not completely dried up. March brought $1.6B of project investments across the U.S., Manufacturing Dive reported.

Part of that was from Freyr Battery, which rebranded as T1 Energy after canceling its Georgia battery factory project. T1 Energy will invest $850M in a solar cell manufacturing facility in Texas.