Policy uncertainty leads to $1.4 billion cancelled U.S. manufacturing investments in May – pv magazine USA

Report on U.S. Clean Energy Manufacturing Investments and Policy Impact – June 2025

Overview of Investment Cancellations

In May 2025, approximately $1.4 billion in U.S. clean energy manufacturing investments were canceled due to policy uncertainty, as reported by the research group E2. Republican congressional districts have been most affected, experiencing over $9 billion in projects canceled, delayed, or shut down so far this year.

Context and Background

The surge in U.S. industrial production over the past three years was largely driven by the Inflation Reduction Act (IRA). However, this momentum faces challenges as the U.S. Senate prepares to vote on a significant tax and spending bill that proposes increased taxes on clean energy factories and projects. This development threatens the progress made under the IRA, according to E2’s “Clean Economy Works” report.

Clean Energy Manufacturing Investments

• Solar manufacturing investments announced since 2022 total $45.8 billion (Solar Energy Industries Association data).
• Of these, $9.1 billion are operational facilities, $15.6 billion are under active construction, and $21.1 billion are in development.

Impact of May 2025 Cancellations

1. $1.4 billion in new factories and clean energy projects were canceled or at risk.
2. Notable cancellations include REC Silicon, Kore Power, and Meyer Burger.
3. These cancellations were expected to create at least 1,000 new jobs.
4. Additionally, 600 workers were laid off across five closures announced in May.

Year-to-Date Investment and Job Losses

• Total canceled investments in the first five months of 2025 reached $15.5 billion.
• These cancellations affected solar module, battery, and electric vehicle (EV) manufacturing facilities.
• Approximately 12,000 potential new jobs were lost due to these cancellations.

Legislative Factors Affecting Clean Energy Manufacturing

• The 2022 federal legislation extended the 45X Advanced Manufacturing tax credit through 2034.
• The proposed Senate bill seeks to end the 45X credit one year earlier and introduces restrictions related to sourcing from Foreign Entities of Concern (FEOC), increasing policy uncertainty.
• The bill is pending a Senate vote and subsequent House consideration.

Geographical and Political Distribution of Clean Energy Projects

• Republican districts have benefited significantly since 2022, hosting:
• 62% of all announced clean energy projects
• 71% of all related jobs
• 82% of all investments
• Despite this, these districts have experienced the greatest losses in 2025, with over $9 billion in investments and nearly 10,000 jobs canceled, delayed, or closed.

Statements on Policy Uncertainty and Economic Impact

Michael Timberlake, E2 Communications Director, emphasized the negative consequences of ongoing policy uncertainty and potential tax increases on clean energy businesses. He warned that scaling back tax credits threatens the American energy and manufacturing boom, potentially leading to reduced renewable energy availability and higher electricity prices for consumers and businesses.

New Investments Amidst Challenges

• Despite cancellations, May 2025 saw nearly $450 million in new investments announced for solar, EV, and grid/transmission equipment factories across five states.
• Rivian announced a $120 million investment to build an EV supplier park in Illinois, expected to create 100 new jobs.
• Overall, eight projects announced in May are projected to create at least 1,310 new permanent jobs upon completion.

Clean Energy Project Landscape

• E2 tracks 397 major clean energy projects across 42 states and Puerto Rico.
• Total announced investments amount to nearly $132 billion.
• These projects are expected to support approximately 123,000 permanent workers.

Alignment with Sustainable Development Goals (SDGs)

The developments in U.S. clean energy manufacturing directly relate to several United Nations Sustainable Development Goals:

• SDG 7 – Affordable and Clean Energy: Investments in solar, battery, and EV manufacturing promote access to sustainable energy.
• SDG 8 – Decent Work and Economic Growth: Job creation through clean energy projects supports inclusive and sustainable economic growth.
• SDG 9 – Industry, Innovation, and Infrastructure: Expansion of clean energy manufacturing fosters resilient infrastructure and innovation.
• SDG 13 – Climate Action: Clean energy investments contribute to reducing greenhouse gas emissions and combating climate change.

Policy uncertainty and investment cancellations pose risks to achieving these SDGs by slowing the transition to a sustainable and low-carbon economy.

Resources and Further Information

For a comprehensive map and list of clean energy project announcements, visit e2.org/announcements. E2 will continue to update data on cancellations and new investments in the coming months.

1. Sustainable Development Goals (SDGs) Addressed or Connected

1. SDG 7: Affordable and Clean Energy
   • The article discusses investments in clean energy manufacturing, solar, wind, and EV projects, highlighting the importance of clean energy production and infrastructure.
2. SDG 8: Decent Work and Economic Growth
   • Job creation and layoffs related to clean energy projects are emphasized, reflecting impacts on employment and economic growth.
3. SDG 9: Industry, Innovation, and Infrastructure
   • Focus on manufacturing investments, industrial production surge, and infrastructure development in clean energy sectors.
4. SDG 13: Climate Action
   • Clean energy investments and renewable energy supply relate directly to climate change mitigation efforts.

2. Specific Targets Under Those SDGs Identified

1. SDG 7: Affordable and Clean Energy
   • Target 7.2: Increase substantially the share of renewable energy in the global energy mix.
   • Target 7.a: Enhance international cooperation to facilitate access to clean energy research and technology.
2. SDG 8: Decent Work and Economic Growth
   • Target 8.5: Achieve full and productive employment and decent work for all women and men.
   • Target 8.2: Achieve higher levels of economic productivity through diversification, technological upgrading, and innovation.
3. SDG 9: Industry, Innovation, and Infrastructure
   • Target 9.2: Promote inclusive and sustainable industrialization and, by 2030, significantly raise industry’s share of employment and gross domestic product.
   • Target 9.4: Upgrade infrastructure and retrofit industries to make them sustainable.
4. SDG 13: Climate Action
   • Target 13.2: Integrate climate change measures into national policies, strategies, and planning.

3. Indicators Mentioned or Implied to Measure Progress

1. Investment Amounts in Clean Energy Manufacturing
   • Indicators related to total dollar value of investments, e.g., $45.8 billion in solar manufacturing investments, $1.4 billion canceled in May, $15.5 billion canceled in first five months of 2025.
2. Job Creation and Job Loss
   • Number of new jobs expected or created (e.g., 12,000 jobs expected from canceled projects, 1,000 jobs lost in May cancellations, 1,310 new permanent jobs expected from new projects).
   • Number of layoffs reported (e.g., 600 workers laid off in May).
3. Number of Clean Energy Projects
   • Total projects tracked (397 projects across 42 states and Puerto Rico).
   • Percentage of projects, jobs, and investments by congressional district party affiliation (e.g., 62% projects in Republican districts).
4. Renewable Energy Supply Share
   • Renewable energy supplying more than 90% of new electricity in America last year.

4. Table: SDGs, Targets and Indicators

Source: pv-magazine.com