Since the passage of the Inflation Reduction Act (IRA) in August 2022, the clean economy had experienced a wave of manufacturing growth and job creation. But Q1 2025 marks the steepest decline yet. High-profile cancellations include:
Manufacturing was the hardest-hit category, with 28 projects shelved, leading to the loss of over 12,500 jobs and $7.37 billion in investments. Battery and EV sectors were especially vulnerable, accounting for a combined 10,209 job losses and $6.1 billion in pulled funding.
Ironically, Republican-led congressional districts—those that have received the bulk of clean energy investment over the past two years—are now experiencing the most substantial setbacks. According to E2:
The downturn is largely attributed to growing market unease as congressional leaders debate repealing federal clean energy tax credits. The Trump administration’s recent executive actions—including loosening regulatory frameworks and rolling back climate commitments—have added to investor hesitation.
“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,” said Michael Timberlake, Communications Director at E2. “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.”
Despite a challenging quarter, March delivered encouraging signs with ten new project announcements across six states. These include:
Combined, March projects represent more than $1.6 billion in investment and over 5,000 potential new jobs—an indicator that long-term confidence in U.S. clean energy remains, even amid short-term volatility.
Data from E2 reveals distinct patterns in the type and location of affected projects:
At the state level, Georgia ($2.9B), California ($2.2B), and Arizona ($1.2B) saw the highest volumes of canceled investments. Together, 16 states lost at least one major project in the first quarter of 2025.The Q1 2025 contraction underscores the fragility of clean energy expansion in the face of shifting federal priorities. While March’s surge in new announcements signals that the sector is not retreating entirely, future growth will hinge on consistent policy support.
As the industry braces for additional congressional decisions, stakeholders across energy, manufacturing, and finance will be closely watching whether the U.S. government can restore the regulatory stability needed to attract long-term investment.
For more detailed information and data, refer to E2's full report: E2 March Clean Economy Works Update.
