Dive Brief:
In the first half of this year, project financing for the U.S. clean energy sector reached about $86 billion, rising from $80 billion in the same period last year, according to a report by Crux, a financial technology firm focused on tax credit transactions.
Despite the political turbulence following President Trump’s administration, which saw some Biden-era policies rolled back, clean energy investment continued to grow. This included the passing of the One Big Beautiful Bill Act, which affected certain tax credits from the Inflation Reduction Act.
Crux CEO Alfred Johnson remarked that the market is expanding and diversifying. There continues to be significant activity in wind and solar investments, and this trend is expected to persist in the coming years, with anticipation for even greater diversification as the year progresses.
Dive Insight:
Many of the new investment opportunities come from sectors that were less impacted by tax credit changes. Particularly, storage tax credits remained largely intact and are booming, according to Johnson.
The report notes that the transferable tax credit market surged to over $20 billion in the first half of this year, almost doubling from the same timeframe in 2024.
The growth is driven by a wider array of technologies and project sponsors, especially in energy storage alongside traditional solar and wind projects. Emerging sectors such as advanced manufacturing, clean fuels, and geothermal are also gaining traction.
Johnson highlighted ongoing bipartisan support for sectors like advanced manufacturing and nuclear energy, which have seen substantial investments reflected in the tax credit market.
However, not all technologies are experiencing the same level of investment. Wind energy, both onshore and offshore, is facing challenges, with the market share of wind production tax credits (PTCs) sold declining significantly.
As tax credits for wind and solar are phasing out faster than expected, developers are adjusting to new regulatory realities. Johnson commented on the complexities of the current clean energy landscape, emphasizing the diverse forces at play.
Despite some expected contraction in the tax credit market later this year, Crux estimates that various crucial technologies will generate significant transactions in the second half of 2025, particularly in advanced manufacturing and storage.
In summary, while challenges exist, the clean energy market continues to evolve, with diverse opportunities for investment on the horizon.