Is U.S. clean energy declining in 2025?

July 29, 2025

Over the last few weeks, the conversation around renewable energy in the U.S. has shifted. Despite the repeal of key federal incentives, demand for clean electricity in the U.S. remains strong and accelerating. Innovo is positioned to serve the relentless demand. 

The recent Ezra Klein Show episode titled “Is Decarbonization Dead?” sparked a wave of concern about the future of U.S. clean energy markets. The conversation focused on Trump’s rollback of the Inflation Reduction Act (IRA), a move that many have taken as a signal that the clean energy transition in the U.S. is unraveling.

It’s not.

Here’s what’s true: Trump’s “Big Beautiful Bill” eliminated critical federal incentives that were accelerating renewable energy deployment.

But here’s what’s just as true, and far more important: demand for clean energy remains relentless. Supply-side politics may have changed, but the demand-side fundamentals have not. And that’s what will keep the market moving.


What did the Big Beautiful Bill actually change?


Trump’s legislation repealed the core tax credits that underpinned clean energy buildout in the U.S. The Clean Electricity Production and Investment Tax Credits, which covered up to 30% of wind and solar project costs, are gone.

  • Project costs rise 40–50%, forcing developers to re-price or delay assets;
  • Projected emissions reductions are reduced from 40–43% by 2030 under the IRA, down to 20–24% today;
  • Additional provisions introduced subsidies for coal, benefiting export markets and undermining U.S. clean energy competitiveness.

This is a real supply shock. Long-term project economics are now less favorable. Capital intensity has gone up. And grid expansion will be slower than it should be.

But the forces driving clean energy demand? They’re still moving fast.


What hasn't changed around clean energy?

Relentless Demand. The demand for clean electricity in the U.S. isn’t based on tax credits. It’s rooted in structural market trends and those trends are intensifying:

  • U.S. electricity demand is expected to grow 25% by 2035, fueled by AI data centers, electrified transport and heating, and new industrial loads.
  • Corporate procurement is surging with companies signing over 20 GW of renewable energy PPAs in 2023 and a record 28 GW in 2024, reflecting strong momentum in renewable energy contracting.
  • State-level clean energy mandates are unchanged.
    • Illinois: 100% clean electricity by 2045
    • New York: 70% renewables by 2030

These mandates operate independently of federal politics.


How do regulatory pressures shape demand?

SEC climate disclosure rules, EU’s CSRD, and CDP frameworks all require companies to account for electricity-related emissions. This drives demand for RECs and verified clean energy claims in the voluntary market.

We see it clearly: corporate buyers are not exiting. They’re just getting more selective, and more focused on ease, integrity, and speed. That’s where infrastructure matters.

The clean energy market is no longer driven just by supply, it’s pulled forward by buyers who know what they want and need better tools to access it.

Bottom Line: Is decarbonization dead?

No. While federal headwinds are real, clean energy demand in the U.S. is not going away. It’s growing. The drivers behind it including corporate mandates, cost savings, grid electrification, and investor scrutiny, are bigger than any one policy cycle.

We need clean energy because we any kind of energy we can get, period, to meet rising demands. Clean energy is cheaper, faster, and more easily deployed. It's not political, its survival.

Trump may have changed the incentives, but the market hasn’t changed its mind.

Transacting in today’s clean energy markets is still slow, opaque, and fragmented. At Innovo, we’re building to make clean energy move faster. By providing a settlement layer for RECs, we help clean energy assets transfer, clear, and close like the financial assets they are. Because demand is already here and it’s not slowing down.

Even if fewer projects are built, what does get built will still get bought. Clean energy buyers need speed and clarity.