In less than three weeks, President Trump has thrown the U.S. clean energy industry into chaos, with much of the economic damage hitting Republican states and districts.
In a quest to eliminate any funding linked to climate change, the Trump administration has frozen federal grants for everything from battery factories to electric school buses and issued executive orders that have halted federal approvals for wind and solar projects.
Mr. Trump and Republicans in Congress are also working to repeal the 2022 Inflation Reduction Act, which is projected to pour hundreds of billions of dollars over the next decade into low-carbon energy technologies through tax credits, loans and grants.
So far, Republican-voting communities have benefited the most from that law. In the nearly three years since it was passed, private companies chasing the law’s tax breaks have announced plans to spend $165.8 billion to build factories that make solar panels, wind turbines, electric vehicles and more, according to new data from Atlas Public Policy, a research firm. Roughly 80 percent of those investments are in Republican congressional districts, where they are creating a once-in-a-generation manufacturing boom.
The Inflation Reduction Act, along with a separate 2021 bipartisan infrastructure law, also provided tens of billions of dollars in grants that have since been awarded by the federal government to private companies, states and nonprofit organizations. These are legally binding obligations that have allowed companies to make investments, sign leases and hire workers, with the expectation that they would be reimbursed by the government.
Two federal judges have ordered the Trump administration to end its freeze and release money from programs authorized by Congress, but there is evidence that several agencies are still blocking funding.
The uncertainty is delaying projects and halting investments in areas that voted for Mr. Trump. In Montana, a biofuels plant did not receive on time a $782 million payment it was owed, the first part of a $1.67 billion federal loan guarantee. In Georgia, $1 billion in projects to modernize the power grid are on hold. In Nevada, a half-dozen large solar projects on federal lands are caught in a permitting freeze.
The upheaval has put Republicans in the tricky position of defending a White House that deems money for clean energy a “waste of taxpayer dollars” while working behind the scenes to protect their towns from the loss of new manufacturing jobs.
“This is where we get a test of whether the Republican Party is a real political party serving its constituents, or a personality cult,” said Jason Walsh, executive director of the BlueGreen Alliance, a coalition of labor unions and environmental advocacy groups.
“I expect thousands of people to be laid off, I expect workers to be furloughed, and I expect construction projects to halt,” Mr. Walsh said.
The political turmoil could put planned manufacturing projects at risk, analysts said. Of the nearly $30 billion in clean technology factories that were scheduled to come online in 2025 — including manufacturing facilities for solar, wind, batteries and electric vehicles — more than half are now predicted to face delays or cancellations, according to a new report by BloombergNEF, a research firm.
That’s not solely because of Mr. Trump. Some factories were already struggling with weaker-than-expected demand for electric vehicles, rising costs or foreign competition.
But many manufacturers now face “significant political uncertainty” on top of that, as companies wonder whether the Trump administration will repeal or modify federal loans and tax incentives, said Antoine Vagneur-Jones, head of trade and supply chains at BloombergNEF.
“Bringing a lot of this manufacturing back to the United States would be tricky even in the best case,” Mr. Vagneur-Jones said. “You need massive amounts of political determination and policy clarity to pull this off. And when that’s lacking, things start to get very messy.”
At the Environmental Protection Agency, programs funded through the Inflation Reduction Act remain paused despite the recent court orders, according to internal emails. That included grants to states for reducing air pollution at ports and schools, monitoring pollution levels in neighborhoods next to industrial facilities and installing solar panels in low-income communities. And at the Energy Department, employees said money for various grants and awards was still frozen.
The Interior Department has stopped permitting for solar and wind projects on public lands and waters for at least 60 days, saying it was conducting a review. At the Army Corps of Engineers, permitting for 168 renewable energy projects was paused last week. On Thursday that pause was lifted, but not for wind power projects, said Doug Garman, an agency spokesman.
The White House declined to comment. Neither the E.P.A. nor the Department of Energy responded to requests to explain why they halted legally binding contracts despite the judge’s order.
The uncertainty over whether Republicans might repeal major clean-energy incentives to pay for Mr. Trump’s tax cuts and immigration policies is also making investors nervous.
In the Midwest, a Canadian solar manufacturer called Heliene that has already built one factory in Minnesota has held off on deciding whether to build a larger solar cell factory in the region, citing the possibility that Congress might modify key manufacturing tax credits.
In the Northeast, offshore wind companies are pulling back plans for multibillion-dollar investments after Mr. Trump issued a sweeping executive order halting approvals for turbines in the ocean. On Monday, New Jersey abandoned plans to award new offshore wind contracts after Shell withdrew from the most promising project.
While many planned offshore wind farms would be in Democratic-led states like New York and Massachusetts, the projects themselves support a $25 billion supply chain that includes steel mills, shipbuilders and other manufacturers across 40 states, including Ohio, Louisiana and Texas, according to a report by the Oceanic Network, a nonprofit group that represents the offshore wind industry and its suppliers.
“When a big, multibillion dollar project doesn’t move forward, there are so many downstream investments that are affected,” said Stephanie Francoeur, a spokeswoman for Oceantic.
The freeze has put Democrats in the unusual position of insisting that money continue to flow to their political rivals.
“It is illegal and we’re not going to stand for it,” said Representative Kathy Castor, a Florida Democrat. “We’re going to fight back to make sure that these dollars get to where they are supposed to go.”
Democrats passed the Inflation Reduction Act on a party-line vote in order to fight climate change. But many of the economic benefits ended up flowing to Republican districts, which often have more available land, a skilled manufacturing work force and friendlier permitting processes. The Biden administration also strategically directed grant money to Republican states, hoping to make the law more durable.
Yet Republicans whose districts have projects that are now on the chopping block have refrained from publicly criticizing Mr. Trump’s actions.
“There might be some things in there that are worth saving,” said Representative Michael Rulli, Republican of Ohio, whose district has $415 million in private investment spurred by federal incentives, including a $230 million auto parts manufacturing facility in Dover that is expected to create 650 new jobs. “That’s going to take a little time to figure out,”
Some have supported Mr. Trump’s spending freeze. Representative Rick Allen, Republican of Georgia, represents a district that has received $1.6 billion in private investments since the law’s passage, with one company receiving a $670.6 million loan from the Energy Department for a new facility that makes equipment to reduce the risk of electrical-vehicle fires. Asked about the spending freeze, Mr. Allen claimed without evidence that the Biden administration had doled out money improperly.
“All we want to do is know where the money is going, how the grants were applied for and whether they were applied for lawfully,” Mr. Allen said. “Don’t you think when you apply for a grant it should be a lawful application?”
On Wednesday, more than 160 solar energy executives met with Republican and Democratic lawmakers to pitch them on the economic benefits of maintaining federal tax credits for solar projects as well as for the factories that produce them.
“We got a very receptive hearing on the Republican side,” said Abigail Hopper, the chief executive of the Solar Energy Industries Association, a trade group. “We talked about how electricity demand is growing and we need more energy for energy security and national security. And solar and storage is one of the fastest resources we can develop.”
Other companies hope to persuade the administration that their projects fit the theme of “energy dominance,” one of Mr. Trump’s goals.
Take KORE Power, a battery cell developer. During the Biden administration, the company won a conditional commitment for an $850-million loan from the Energy Department to build a factory in Arizona that could produce lithium-ion cells for batteries on the electric grid. Batteries can help store electricity for times when power demand spikes, sometimes reducing the need to burn natural gas.
But the loan wasn’t finalized before Mr. Trump took office, and this month the company canceled plans for the Arizona plant, citing rising construction costs.
Jay Bellows, the chief executive of KORE Power, said that the company would instead try to expand battery production elsewhere in the country at a lower cost by retooling older factories. The company hopes to finalize its loan with the Trump administration, though it will need to renegotiate the terms.
“Even if we’re shifting the mind-set away from renewables, we’re still going to need energy storage on the grid,” Mr. Bellows said. “And we’re a U.S. company with U.S. products, right? I think this falls perfectly in line with what this administration is looking to achieve.”
Behind the scenes, energy lobbyists said Republican lawmakers were aware of the damage that a halt in clean energy investments could do to their hometowns.
“We just met with more than a dozen key Republican offices, and I can tell you nobody wants to kill jobs,” said Bob Keefe, executive director of E2, a nonpartisan group of business leaders and investors. “They don’t want to have to go back and face constituents and tell them that the factory I just cut the ribbon on might not be coming. That’s going to put them in a hard place.”
