Manufacturers are feeling the effects of more than $24 billion worth of renewable energy project cancellations this year.

The latest data, compiled by E2 and the Clean Economy Tracker, shows $1.6 billion worth of cancellations in September after $7 billion in June alone. This affects major manufacturers and technology suppliers for electric vehicles, solar, wind, battery, storage and related components. 

Among the most notable cancellations are major projects such as General Motors’ $4.3 billion plan to expand its electric pickup trucks facility in Michigan. The company recently reported a $1.6 billion impairment charge owing to the “termination of tax incentives for EV purchases,” referring to the $7,500 consumer credits which expired at the end of September. 

Another major player, Toyota, canceled a $1.4 billion electric SUV facility in Indiana. In addition, Kore Power canceled plans for its $1.2 billion battery cell plant in Arizona after not receiving funds from an $850 million conditional U.S. Department of Energy loan.

All these project closures combined have affected an estimated 21,000 jobs this year, with more than 5,000 cuts in June and 3,000 in September.

These are not just temporary construction jobs, but long-term manufacturing positions to be filled once the facility becomes operational, said Michael Timberlake, director of research and publications at E2 and author of the Clean Jobs America report. These are “conservative numbers,” he added, because they exclude construction labor and many canceled projects never shared investment figures or job estimates when they were initially announced. 

“The primary factor contributing to the billions of dollars in project cancellations this year is policy uncertainty caused by federal repeals,” said Robbie Orvis, senior director of modeling and analysis at Energy Innovation, a non-partisan energy and climate policy think tank. 

Policy shift

The One Big Beautiful Bill Act, passed in July, rescinded several tax credits and incentive programs for renewable energy initiatives.

The new policy made many energy projects ineligible for incentives earlier offered by the Biden administration under the Inflation Reduction Act. This led projects that were built on and heavily dependent on this funding to be paused, postponed, canceled or moved offshore. 

In September, Office of Management and Budget Director Russell Vought announced the cancellation of nearly $8 billion in grants for 223 projects across 16 states. The funding cuts include $1.2 billion for California’s hydrogen hub, which could have created 200,000 jobs. 

About $20 billion in renewable energy funding remained frozen as courts weighed whether the Trump administration can legally claw back funds already distributed through the Greenhouse Gas Reduction Fund and Solar for All programs, said Fox Swim, senior solar industry researcher at Aurora Solar. Beneficiaries of the incentive programs filed suits against the U.S. EPA for terminating the program and a federal appeals court recently ruled that the funds can be taken back. 

Elimination of EV tax credits, which made vehicles produced in the United States more affordable, could lead to a decline in sales and reduced investment in the sector, Timberlake said. Meanwhile, he said, “tax credits for batteries and geothermal will remain but are now riddled with complex new restrictions.” 

There are also new foreign entities of concern restrictions for the 45X manufacturing tax credit, which was originally designed to encourage the domestic manufacturing of renewable energy components, including solar panels, wind parts, battery components, inverters and critical minerals. The restrictions will limit the ability of foreign companies to claim the tax credits and work on U.S.-based projects.

“This will make it harder to build new giga-factories and compete globally in battery, solar and wind manufacturing,” Timberlake said. 

“In addition to these policy changes, the Trump administration’s imposing tariffs and barriers to clean energy deployment — for example, refusing to issue necessary permits — has complicated financing and building new projects, causing many projects to be canceled,” Orvis said.

Instead, the Trump administration is taking measures to promote the use of fossil fuels.

“The Trump administration has made no secret of its stance on renewable energy,” Swim said. “In its view, the U.S. power grid should rely primarily on coal, natural gas, hydroelectric and nuclear.”

To enable this, President Donald Trump signed two executive orders early this year. The first, “Unleashing American Energy,” directs federal agencies to remove what it calls “unnecessary constraints” on domestic fossil fuel production and to review or rescind renewable energy incentives that “distort market competition.” The second, “Protecting American Energy from State Overreach,” aims to limit states’ authority to block or regulate fossil fuel infrastructure projects under environmental or climate-based criteria.

Experts say the new policies make it harder for renewable energy technology manufacturers to operate and expand. In many cases, manufacturers like GM and Toyota have shifted to fossil fuel-based projects in response to changes in government funding and incentives. 

What’s next for the energy sector?

The canceled projects aren’t just affecting the involved companies, but also disincentivizing the entire energy sector, experts said.

“The uncertainty created by recent regulatory changes and political opposition will make companies more hesitant to commit future investments in the U.S. clean energy market,” Timberlake said.

Orvis said this could lead companies to prioritize countries with more favorable and stable policies. 

Over the long term, Timberlake said this could result in “hundreds of billions of dollars in lost economic growth, with global competitors gaining ground as the U.S. steps back from a leadership role in clean energy.”

In the short term, companies might accelerate plans to take advantage of 45Y and 48E tax credits that will expire by the end of 2027. But the long-term outlook is gloomier, according to Orvis, as hundreds more grants get canceled.

“Continued hostility towards clean energy deployment and manufacturing will almost certainly lead to further project cancellations,” he said.

The ripple effects will be felt much beyond the manufacturing industry as cancellations at this scale could lead to large electricity price increases, Timberlake said, adding that “much of the damage is already done” and it may be too late to reverse course.

“With energy demand surging due to AI, data centers and EV charging infrastructure, scaling back clean energy development will constrain supply, strain the grid and drive up prices for households and businesses alike,” he added. “In 2024, renewables accounted for more than 92% of new power generation — slowing or reversing that trend will leave the country paying more for less energy.”