U.S. Cleantech Rollbacks Hurt Both The Climate And Your Wallet |
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When Donald Trump was elected U.S. president for a second time, he promised to promote U.S. energy dominance by increasing production of fossil fuels. Even so, many observers assumed initially that while Biden-era incentives for electric vehicles would be cut, many of the clean energy policies created with the Inflation Reduction Act might stick, given their economic benefits.
That’s because eliminating them, they observed, would deter the supply of new electricity getting onto the grid, since solar, wind and battery systems can be installed much faster than natural gas or nuclear power. Not to mention the fact that the tens of billions of dollars in planned investment would produce tens of thousands of new jobs, particularly in Republican-leaning states in the Southeast. A savvier approach would have been to keep most programs in place, perhaps renaming them the “American Patriot Power Program,” or something similarly jingoistic.
Instead, Trump adhered closely to the Project 2025 manifesto, which advocated for an aggressive rollback of Biden’s “climate fanaticism.” Driven more by spite than economics, he phased out tax credits for large wind and solar projects, residential clean energy tax, clean hydrogen funding and, of course, EV tax credits. Fuel-economy standards for cars and trucks have also been weakened, a gift to carmakers to cash in on sales of profitable, gas-guzzling big SUVs and pickups, but not so good for consumers when fuel prices jump.
Some incentives survived, such as for nuclear and geothermal energy and battery storage. And the moves haven’t killed the growth of utility-scale wind and solar, combined with battery storage – in part because even without incentives they’re often more cost-effective – but they have slowed the pace of additions to the grid, even as electricity demand pushes up power bills for Americans at more than twice the rate of overall inflation. Now with the outbreak of war in Iran, gasoline prices are spiking, up 26% since combat missions began, even though U.S. oil and gas production is at an all-time high. That’s because oil prices are set globally, and if 20% of the world’s oil supply isn’t moving through the Strait of Hormuz due to the war, the price pain is felt everywhere.
Trump’s animus to offshore wind–originating over a decade ago when he decried turbines off the coast of Scotland that were visible from golf courses he was developing–has also led the administration to block several large East Coast wind farms from powering up, even though the region is in desperate need of more electricity. The boom in energy-thirsty data centers is also straining utilities across the country, underscoring the need for an across-the-board embrace of new sources of supply–particularly those that can be added most rapidly and at lowest cost.
And when it comes to cars, of course, the simplest way to insulate drivers from big swings in pump prices is to power them with electricity, ideally from renewable sources. But that market is currently tanking after the elimination of federal rebates, down about a third so far this year. GM, Ford, Stellantis, Honda and other automakers have announced big cuts to their EV programs as a result, totaling more than $60 billion in cumulative losses in recent months.
Oil prices can be relatively stable for extended periods, but sudden and unexpected oil shocks have rattled global markets and hurt consumers’ wallets repeatedly since 1973. By contrast, once renewable utilities are up and running, the cost of sunlight and wind is constant: free.
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Tesla’s Best Growth Story Isn’t Robotaxis—It’s Batteries
Tesla’s era as the market’s can’t-miss EV growth engine has passed, cracking under tougher competition and softer demand. With Chinese rivals now setting the pace globally, Tesla is expected to fall further behind BYD in overall sales again this year.
But while CEO Elon Musk keeps the stock aloft with robotaxi bloviating and Optimus cosplay, the company’s energy arm is doing the one thing Wall Street loves, and hype can’t fake: booking revenue. Inside Tesla’s sprawling identity crisis, grid-scale batteries and, potentially, solar are the closest thing it now has to a can’t-miss bet.
“It's their best business,” said Tesla investor and frequent Musk critic Ross Gerber, CEO of Santa Monica, California-based Gerber Kawasaki. “There's so much demand for energy and the simplest supply solution is solar and battery systems, which have the least cost. Deployment opportunities are just massive right now for Tesla.”
He’s not wrong. For a decade, Tesla has packaged and sold battery cells in Powerwall packs for residential solar installations and much larger Megapacks for utility-scale power storage. In 2025, Tesla’s battery business booked a record $12.8 billion of revenue, up 27%, while its annual auto revenues dropped 10% to $69.5 billion. Tesla is still overwhelmingly a car company by revenue, but the direction of travel is what matters: energy is growing, autos are shrinking, and the macro backdrop suggests that the gap can widen.
And now, with data centers straining utilities’ capacity and pushing residential electricity prices higher, Tesla is also looking to return to solar-panel manufacturing after earlier ambitions, including the solar roof, failed to meet expectations.
Bruce Douglas, CEO of the Global Renewables Alliance, on accelerating the shift from fossil fuels for stability and energy security
Is the current spike in carbon energy prices globally an incentive to accelerate the shift to solar, wind and other renewables?
Governments, in our opinion, should treat these fossil fuel price shocks reverberating around the world economy as a pivotal turning point and urgently accelerate the transition away from it to renewable energy. And it's not just a matter of being cheaper, cleaner and more resilient. It's about national security. We have end-use consumers, you and I and our houses, but also companies being less competitive. So it's an economic shock, it's a national security shock. We see the fastest and most cost-effective way out of this in the longer term is to invest rapidly in renewables, storage, grids and energy efficiency. We've seen that change significantly, with the situation of many countries that have taken that direction, but many more need to follow and fast.
The U.S. has had a reversal of many policies related to clean energy, and even in Europe, there’s some weakening of regulations pushing for carbon-free energy. How do you assess things globally?
Well, interestingly, we don't see that picture. We see the real economy delivering on renewables, both in the U.S., Europe and elsewhere. Renewables have been breaking records in the U.S. in the last few years. The forecast we've seen is that over 90% of the power additions in the U.S. will be renewable energy this year. Europe is definitely not taking its foot off the accelerator, either in terms of renewable rollout. If anything, it’s accelerating. It's nuanced because some countries go faster, some slow down, but the general picture in Europe is positive, and now it's irreversible, unstoppable. Of course, we would say it's not happening fast enough. It can definitely happen faster. The opportunity is there to do so. That's the Renewables Action Plan that we put out. That five-point plan, if implemented, would significantly accelerate low-cost, stable, renewable power.
China is obviously the biggest beneficiary of this shift since it’s the largest supplier of renewable energy tech. Are other parts of the world doing enough to build up their own supply chains?
The simple answer is yes. China is currently the largest manufacturer of clean energy technologies across all sectors. But it's also got the largest domestic market for taking those technologies. Almost all wind turbines manufactured in China are currently used in China. So the supply and demand are there in China. Secondly, many other countries are already manufacturing clean energy technologies. Europe is doing heat pumps and wind turbines, South Korea is doing electric vehicles, Vietnam and India have solar, and Brazil is doing wind.
What we see there is a huge opportunity to build regional hubs for manufacturing. And they’re not just doing it. They're accelerating dramatically. There's a lot of appetite for renewable energy, and we're currently keeping up with growth in terms of manufacturing. But that's where we see the opportunity.
Obviously, a benefit is that the price of wind and sunlight never varies.
On fossil fuels versus renewables: Fossil fuels are an extractive industry, but it's the flows that matter. If you burn a barrel of oil now, you need to buy another one tomorrow. Whereas with renewable energy, the reason it's less fragile and less insecure is because it's a productive industry.
If I purchase a solar panel today, it'll still be generating in 25 years. It doesn't eliminate the security risk, but it dramatically reduces it. And we can predict how much wind and solar will cost in a few years' time. We have no idea what oil and gas will cost tomorrow.
Wind and sun don’t fluctuate in price. Also, you can't hold them hostage. You can't prevent them. They're free, obviously. So the advantages are huge. We can assume that oil and gas will be high and volatile going forward, and that renewables will be stable and low-cost going forward. That's just the resource. And then the manufacturing piece is interesting because, in principle, anybody can do that, whereas with fossil fuels, the resource is limited to a few geographical locations.
For many years, a key argument for renewable energy has been its climate benefits. You see it as wiser to point out cost, national security benefits and energy stability?
Indeed. I've never seen climate as the big driver. It's a huge beneficiary of what we're doing. I often say the energy system doesn't obey ideology on both sides, climate or anti-climate. It obeys economics. And that's what we’re seeing: Investment now in renewables is significant and growing.
What Else We’re Reading
Trump administration readies plan to dismantle the renowned National Center for Atmospheric Research lab (New York Times)
China’s new green law signals Xi’s environmental ambitions (Bloomberg)
U.S. sues California over zero-emission vehicle, greenhouse gas rules (Reuters)
‘Severe water stress’: Why desalination plants are the Persian Gulf’s greatest weakness (The Guardian)
After a decade of missteps, Corpus Christi careens toward a water catastrophe (Texas Tribune)
Oil and gas workers find an easy segue into geothermal energy jobs (Canary Media)