Federal Uncertainty Sends Shockwaves Through U.S. Clean Energy Sector As Q2 Data Reveals Alarming Investment Slowdown

The American Clean Power Association (ACP) has released its Clean Power Quarterly Market Report for the second quarter of 2025, showing that U.S. developers added more than 11 gigawatts of new utility-scale solar, wind, and energy storage projects. These installations represent $15.2 billion in investments and bring the total amount of clean energy capacity operating across the United States to more than 332 gigawatts, which is enough to power over 81 million homes.

Despite these additions, the growth represents less than a one percent increase compared to the same quarter in 2024, a sign that the clean power industry is facing headwinds. The pipeline of planned clean power projects showed almost no movement, growing by less than 100 megawatts to reach 184.5 gigawatts. Solar installations have dropped significantly, falling by 23 percent in the first half of 2025 compared to the previous year. Power Purchase Agreements (PPAs), which are contracts that secure clean energy for future delivery, also saw a steep decline, an early warning that federal policy challenges and shifting trade rules are undermining the country’s energy security and economic growth.

ACP’s CEO, Jason Grumet, expressed concern over these trends. He explained that while clean energy projects continue to add essential power to the grid, restrictive federal policies and unclear mandates are discouraging investment. Grumet stated that uncertainty created by bureaucratic delays and unclear requirements is freezing future projects at a time when the nation urgently needs more energy to support its expanding economy.

The report links these problems to federal actions from multiple agencies and an unstable tariff environment. As a result, developers and buyers have pulled back on new agreements, with 32 percent less capacity being contracted through PPAs in the first half of 2025 compared to the same period in 2024. Other types of agreements fell by 48 percent over the same period. Battery storage PPA announcements fell 88 percent between the first and second quarters of 2025, and wind PPAs dropped by 93 percent. Prices for corporate wind and solar PPAs also rose, increasing by 6 percent compared to the previous quarter and 8 percent compared to a year earlier. This uncertainty has stalled procurement growth as companies wait for clearer tax credit guidance and attempt to adjust to changing trade agreements.

In terms of construction, developers reported 83,403 megawatts of clean power projects under construction by mid-2025, spread across 580 different projects. Texas leads the country with 21 gigawatts of projects under development, followed by Arizona with 7.8 gigawatts, California with 7.2 gigawatts, New Mexico with 4.8 gigawatts, and Wyoming with 4.1 gigawatts. Energy storage continues to be an area of growth, with over 6.5 gigawatts of new storage capacity added in the first half of 2025—an increase of 63 percent compared to the first half of 2024.

Arizona achieved a major milestone this quarter by surpassing 10 gigawatts of total clean power capacity. During the quarter, the state added 1,220 megawatts of new solar capacity and 1,369 megawatts of new storage capacity. Arizona now has the third-largest storage fleet, the fifth-largest utility-scale solar capacity, and the second-largest clean power pipeline in the United States, behind Texas.

State-level data show that most of the new capacity added in Texas, Indiana, Arkansas, Kansas, and Michigan came from solar projects. Illinois was the only state among the top ten for quarterly additions to install more wind capacity than solar. The report also points out that eight of the top ten states for clean power additions in the second quarter voted Republican in the most recent presidential election, emphasizing that clean energy growth is not limited to one political party.

ACP highlighted the broader importance of clean energy, noting that it is the fastest energy resource to deploy. Clean power helps keep electricity bills affordable and ensures reliability for households and businesses. Grumet stressed that with electricity demand at historic highs, the country cannot afford policies that slow down power production or increase household energy costs. He emphasized the need for stable and supportive policies to allow all forms of energy to contribute to meeting America’s growing electricity needs.