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In Q1 2026, U.S. clean energy investments were heavily influenced by executive branch implementation and policy certainty. While electric power investments increased—driven by a massive nuclear project in Texas—manufacturing investments declined for the sixth consecutive quarter. Federal support strongly favored critical minerals and battery storage, while sectors like hydrogen, solar, and sustainable aviation fuel (SAF) faced mixed outcomes due to fragile policy support and tightened tax credit eligibility windows.

The analysis finds that recent federal policy shifts—including the One Big Beautiful Bill Act (OBBBA) and the repeal of various EPA standards—will lead to higher energy costs for households, significant GDP and job losses, and increased healthcare spending due to worsening air pollution. While a temporary boom in renewables is expected due to safe-harbor tax credit rules through 2030, the report forecasts a sharp contraction in clean energy capacity and a continued reliance on coal power after 2031.

The document asserts that clean energy provides lower costs and less risk for meeting growing electricity demand compared to existing federal policy approaches. It criticizes the federal government for forcing aging coal plants to remain operational, investing in expensive new gas plants, and repealing tax credits for wind and solar power, which disrupts investment plans and stalls clean power projects.

The report outlines a framework for federal agencies to optimize the delivery of energy incentives through three core principles: strategic planning, resource management, and communications. It suggests that agencies narrow their priorities, delegate decision-making, and involve industry early in program design to accelerate the commercialization of energy technologies. Specific recommendations include streamlining the application process for grants and loans, tailoring community benefit models to local needs, and providing transparent, phased guidance for tax credits to increase investor certainty.

In Q4 2025, U.S. clean energy investments were characterized by significant uncertainty driven by a record 43-day government shutdown, the One Big Beautiful Bill Act (OBBBA), and Department of Energy (DOE) funding cuts. While utility-scale solar and storage remained strong, with $18 billion in actual investments, other sectors like wind, hydrogen, and sustainable aviation fuel (SAF) faced substantial project cancellations. Nuclear energy showed signs of growth through large-scale partnerships and DOE loans, while the manufacturing sector saw $8.4 billion in EV supply chain cancellations, partly due to shifting federal incentives and corporate pivots toward gas and hybrid vehicles.

The Union of Concerned Scientists analysis finds that data center load growth could increase Illinois electricity system costs by $24 billion to $37 billion by 2050 and drive the state to become an energy importer as early as 2030. Under current policies, this growth would increase reliance on in-state fossil fuel plants and out-of-state imports, leading to higher CO2, methane, NOx, and SO2 emissions. The report estimates that this growth could cause between 68 and 403 additional mortalities and up to $124 billion in climate damages by 2050. To mitigate these effects, the document recommends requiring data centers to secure new carbon-free electricity resources, increasing transparency in power reporting, and restoring federal clean energy tax credits.

The Union of Concerned Scientists analysis finds that Michigan's electricity demand could nearly double by 2050, driven significantly by AI-related data centers. While current policies may lead to increased fossil gas capacity and emissions due to an energy export loophole, a proposed CO2 reduction policy could enable Michigan to meet 95% of its 2050 demand with renewables and low-carbon sources, avoiding $3.5 billion in local health costs and $408 billion in global climate damages.

The report details a shift in U.S. federal priorities that has narrowed incentives for clean energy, primarily through the One Big Beautiful Bill Act (OBBBA) and executive agency actions. It highlights significant tax credit repeals or restrictions, DOE funding cancellations, and EPA reporting rollbacks that have created deep uncertainty across the electric power, manufacturing, and energy and industry sectors. While some investments accelerated to meet new deadlines, others—particularly in hydrogen, sustainable aviation fuel, and carbon management—have declined or relocated abroad.

H.R. 1 expands the 45Z Clean Fuel Production Credit through 2029 but reduces the maximum credit for sustainable aviation fuel (SAF) from $1.75 to $1.00 per gallon. By excluding indirect land use change (ILUC) emissions from carbon intensity (CI) scores, the bill increases subsidies for conventional corn ethanol and soy biodiesel. The Joint Committee on Taxation estimates these changes will cost taxpayers $25.7 billion from FY25-34, a significant increase from previous estimates, without providing proportional greenhouse gas emission reductions.

RMI analysis indicates that clean energy portfolios—combining solar, storage, and energy efficiency—are lower cost and lower risk than JEA's proposed gas plant. While JEA's 2023 estimates suggested gas was the cheapest option, updated capital costs (which have risen by 139%) and fuel price projections suggest a gas plant could cost $4.8 billion in NPV. In contrast, CEPs are estimated to cost between $2.1 and $3.4 billion depending on energy efficiency levels. Additionally, the gas plant is projected to cause over $1 billion in negative health effects across Florida, whereas CEPs could generate up to $757 million in local economic benefits and thousands of jobs.

The Clean Air Task Force (CATF) argues that for FEOC restrictions to achieve their goal of promoting U.S. competitiveness, the U.S. Department of Treasury must provide clear definitions and reporting frameworks. CATF recommends a narrow definition of "effective control" to protect licensing agreements, a clear reporting framework for supplier certifications, the adoption of a "substantial transformation rule" to prevent subcomponents from disqualifying a final product, and limited lookback periods for credit recapture to reduce risk for developers.

The One Big Beautiful Bill Act (OBBBA) introduces a mix of incentives and challenges for US advanced energy manufacturing. While it preserves the 45X production credit and introduces 'full expensing' for capital investments, it also imposes stricter foreign entity of concern (FEOC) restrictions and accelerates the phase-out of certain clean energy tax credits, leading to reduced demand projections for solar, wind, and electric vehicles. The report suggests that manufacturers should pivot toward grid equipment, geothermal, nuclear, and upstream components where demand still exceeds domestic capacity.

The World Resources Institute states that H.R.1. will hinder U.S. clean energy leadership by phasing out wind and solar tax credits and introducing Foreign Entity of Concern (FEOC) restrictions. These measures are expected to increase electricity costs, eliminate jobs, and reduce the power system's ability to meet rising demand from AI, manufacturing, and extreme weather.

The document analyzes how federal clean energy incentives have driven over $321 billion in investments across the U.S. between Q2 2022 and Q1 2025, highlighting that these investments are heavily concentrated in Southern and Western states and Republican-held congressional districts. It argues that rolling back these incentives would disproportionately harm these regions and jeopardize significant outstanding investments in states like Louisiana and North Dakota, as well as major projects in emerging hubs like Southern Arizona and the Southeast.

The policy brief identifies a "missing middle" investment gap where energy infrastructure projects are too large for venture capital but too risky for institutional investors. It proposes a systemic bankability framework consisting of nine conditions—including risk management, regulatory certainty, and infrastructure access—that the federal government must help establish to catalyze private investment. The authors warn that proposed House budget reconciliation cuts to tax credits and the cessation of Department of Energy grant and loan programs threaten the commercialization of strategic technologies like CCS, nuclear, and geothermal energy.

The Clean Air Task Force criticizes recent U.S. executive orders on nuclear energy for failing to provide the financial mechanisms needed to scale deployment, especially as Congress moves to reduce tax credits and restrict the Department of Energy's Loan Programs Office.

The policy brief outlines federal leadership opportunities to bolster U.S. energy security and global competitiveness through the deployment of carbon capture and storage (CCS), advanced nuclear fission and fusion, and superhot rock geothermal energy. It emphasizes the need to bridge the "missing middle" investment gap—where projects are too large for venture capital but too risky for institutional investors—by utilizing a combination of R&D funding, demonstration grants, and extended tax credits. Key recommendations include increasing the 45Q tax credit to $120, extending tech-neutral credits (48E and 45Y) through 2040, and streamlining permitting for CO2 pipelines and Class VI wells. The brief also calls for scaling the nuclear supply chain, modernizing spent fuel policy, and establishing a Geothermal Center for Excellence to ensure the U.S. maintains a competitive edge against international mechanisms like the EU's Carbon Border Adjustment Mechanism.

The author contends that while federal funding is essential for proving new technologies, onerous application processes and unclear requirements hinder innovators. The document recommends implementing a unified application interface, allowing a single application for multiple funding programs, providing clear upfront information needs, and articulating the legal basis for grant requirements to improve efficiency and project viability.

Federal clean energy incentives have already spurred $75 billion in private investment and created over 100,000 manufacturing jobs since 2022. Under a 'High Potential Scenario', these incentives could bring nearly $235 billion in federal investment to US states by 2030, with the largest gains expected in battery manufacturing and hydrogen production.

The briefing identifies five priority areas for Canada to eliminate fossil fuel subsidies: reforming major tax credits, addressing losses from the Trans Mountain Pipeline expansion, ending support for carbon capture and storage, stopping LNG infrastructure subsidies, and ensuring low-carbon funds do not benefit fossil fuel companies. It highlights a lack of transparency, noting Canada failed to publish a promised inventory of subsidies by December 2024. The document also details provincial-level subsidies, including fuel tax cuts and infrastructure support, and calls for a comprehensive inventory of all financial supports to the sector.