US cleantech projects are being delayed and restructured since climate critic Donald Trump’s election in November. But advisors warn that examples of foreign-owned cleantech projects being halted in recent months do not foreshadow an end to the sector’s momentum under the new government.

On January 22, two days after the president signed executive orders targeting cleantech funding and permitting, Australia’s Woodside announced it would not construct its Capella solar project in California and was delaying the final investment decision on its H2OK hydrogen project in Oklahoma. The week prior, Italy’s Prysmian Group told authorities in Massachusetts it was abandoning plans for a $300m undersea cable manufacturing plant to serve the state’s offshore wind industry. 

The fate of roughly half a trillion dollars’ worth of private investment announced under Joe Biden’s climate plan — many of which are critically depend on public funding — hangs in the balance. Lawyers and industry advisors tell fDi they’ve been fielding an influx of questions from cleantech clients since last year’s election. Queries have peaked since January 20 when Mr Trump ordered the freezing of clean energy-focused grant and loan disbursements under the Inflation Reduction Act (IRA) and Bipartisan Infrastructure Law (BIL).

Novus Energy Advisors CEO, Emily Easley, says early stage projects relying on these programmes’ funding are feeling the immediate impact of the White House’s first policy shifts. “Government-dependent projects … are experiencing timeline adjustments” as agencies come to grips with the president’s vaguely worded order to halt grant and loan disbursements for 90 days, until the budget office confirms they align with the government priorities. 

On January 28, a judge delayed the order’s implementation until at least next Monday, offering some breathing room for funding recipients but not a solution. A lawyer at a US firm said over the past week, cleantech firms with projects benefiting from cost-sharing arrangements with the government have been asking if they can incur expenses and be reimbursed as usual, or if they should pause work.  “These are projects that the company, or its investors would not have undertaken but for the government being involved,” he added. 

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Pausing procurement

Companies behind the cleantech foreign direct investment projects scrapped around the inauguration have distanced themselves from the US’s new political climate.

Prysmian Group said its decision was “not linked to any political developments”, stressing that its €18bn worth of contracts are entirely in Europe making its home region the current focus. A Woodside spokesperson told fDi its decision reflected “market conditions” and it will “continue to review the regulatory environment”, including guidance on the IRA’s clean hydrogen tax credits “and its potential impact” on its Oklahoma project. 

However, cleantech projects paused in the immediate wake of the election have made a more explicit link to the new administration. In late November, TotalEnergies’ CEO reportedly told a conference in London it was stopping work on its 3 gigawatt Attentive Energy windfarm off the New Jersey coast for four years, following Mr Trump’s election. 

And late last year, Canadian solar manufacturer Heliene told trade press it was pausing plans for a solar cell manufacturing facility in Minnesota. This week, its CEO Martin Pochtaruk told fDi it was continuing the permitting and planning for the project, but will not procure any equipment until there is “necessary clarity” on the future of IRA tax incentives for solar power manufacturing. 

Aside from pausing projects, investors are reinforcing their cleantech strategies for Trump 2.0 in other ways. Deanna Reitman, a partner at law firm Faegre Drinker, said last week’s executive orders have sparked some project developers to restructure projects that risk being delayed or "deprioritised under the Trump administration” to ensure they remain economically viable. 

Similarly, FTI Consulting’s Robert Kaineg says since November companies have shifted their focus towards less ‘green’ technologies. He gave the examples of blue hydrogen, carbon capture and storage, and small modular nuclear reactors. “People are still interested in investing in cleantech — they’re just trying to align their investments with what they perceive to be the administration’s priorities,” he added.

At the opposite end of the spectrum, Mr Kaineg notes the administration is being “outwardly hostile” to offshore wind — for which leasing and permitting is banned until further review — and electric vehicles (EV). EVs are the only sector specifically named by the order freezing IRA funding, and Mr Trump has repealed the Biden-era goal of 50% of new vehicle sales being EVs by 2030.

A holding pattern

Sean Riddick, a senior advisor at cleantech advisory Apricum, said firms have a “wait-and-see perspective on project development", warning many will be “in a holding pattern” until the Trump administration’s policies become clearer. 

As the industry regroups for Trump 2.0, OCO Global CEO Gareth Hagan is among those to warn the new administration’s policies won’t lead to a large pullback from cleantech investors. “These are becoming structurally important industries globally. The idea that [Mr Trump is] going to give the whole industry a red card? It doesn’t work that way,” he said.

However the Biden-era fervour of clean project announcements, fuelled by the race for incentives, may be a thing of the past. “We’re going to continue seeing project activity, but I would expect it to progress at a more organic pace,” said Tracey Hyatt Bosman, managing director of site selector BLS & Co.

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