Clean energy investments took a significant hit in January, reaching their lowest point since the Inflation Reduction Act (IRA) provided a boost to the industry with tax credits and incentives. The uncertainty surrounding the future of these policies, especially with the Republican-majority Congress considering potential rollbacks, has led to a sharp decline in new projects and an increase in cancellations, as reported by E2.
In January, companies announced only $176 million in new clean energy-related factories and projects. This is the lowest monthly total since August 2022 and only the fourth time that investments have failed to reach at least $1 billion, according to E2. This downward trend is concerning for the industry as a whole.
One notable cancellation was FREYR Battery’s decision to scrap plans for a $2.6 billion battery factory in Georgia, which would have created 700 jobs. Ford CEO Jim Farley also expressed concerns about tariffs and shifting policies potentially leading to layoffs within the company.
E2’s Michael Timberlake emphasized the gravity of the situation, stating, “This is the only time we’ve seen private-sector investment in new projects drop to these levels. We hope leaders in Washington recognize what’s at risk for businesses, workers, and communities across the country if this self-inflicted and unnecessary market uncertainty continues.”
The $176 million in clean energy announcements for January were spread across 11 large-scale projects, with GE Vernova contributing over $120 million to wind, solar, and electric grid manufacturing in multiple states. These projects are expected to create 750 permanent jobs.
Michigan saw the addition of two new projects, a hydrogen-related factory, and a battery storage recycling operation, bringing its total clean energy project count to 36, the highest in the country. Georgia closely follows with 32 projects.
Since E2 began tracking, a total of 372 major clean energy projects have been announced, with planned investments dropping slightly from $132 billion to $129 billion due to cancellations. Job numbers have also decreased from 116,450 to 115,900 across 42 states and Puerto Rico. E2 will begin officially tracking canceled, stalled, downsized, or at-risk projects starting in March.
Republican-held congressional districts have been the primary beneficiaries of clean energy investments, claiming 62% of all projects, 71% of jobs, and 82% of total investments. However, these districts have also experienced the brunt of recent cancellations, with over $2.7 billion in investments and 1,300 jobs lost in January alone – despite the announcement of six new projects in these areas.
For more information and a full map of project announcements, visit the E2 website. The challenges facing the clean energy industry highlight the importance of stable and supportive policies to encourage continued growth and investment in sustainable technologies.
