A New Era of Uncertainty for Clean Energy Manufacturing

The U.S. clean energy sector has entered a period of turbulence, with nearly $8 billion in clean energy investments canceled or scaled back in early 2025. This wave of pullbacks comes in direct response to policy reversals by the Trump administration, which rolled back critical climate-focused initiatives established during the previous term.

These changes have sent shockwaves through the clean energy manufacturing industry in the United States, including sectors such as solar panel production, battery manufacturing, and electric vehicle supply chains. The cancellations mark a stark contrast to the optimism sparked by the 2022 Inflation Reduction Act (IRA), which initially spurred record levels of clean energy investment.

Key Projects Halted or Reconsidered

Among the most notable setbacks is Kore Power's decision to cancel its $1.2 billion lithium battery facility in Buckeye, Arizona. Despite securing a conditional loan for up to $850 million through the Department of Energy (DOE), delays in finalizing the agreement before the new administration took office left the project in limbo. Kore Power is now actively seeking a new location for a retrofitted battery plant.

In total, 16 clean energy projects have been either canceled or significantly reduced across wind, solar, and electric vehicle manufacturing. These include both large-scale infrastructure and smaller regional manufacturing hubs.

Policy Reversals Freeze Clean Energy Momentum

Upon returning to office, President Trump quickly paused climate-related funding tied to the IRA. This included freezes on clean energy tax credits, hydrogen hub grants, and DOE loan guarantees. Simultaneously, new tariffs on imported clean tech components have begun to increase production costs.

The administration claims that such measures represent the elimination of "unobligated Green New Deal balances," targeting programs like the Carbon Dioxide Transportation Infrastructure Finance and Innovation Act and Diesel Emissions Reduction Act (DERA). While cost-cutting is the stated goal, the result is widespread industry uncertainty.

Clean Energy Job Growth at Risk

Despite the policy shift, clean energy remains a major U.S. employment engine. In 2023, the sector added nearly 150,000 jobs, growing more than three times faster than the overall job market. The total number of clean energy jobs in the U.S. approached 3.5 million by year-end.

Border states such as Texas, Arizona, and New Mexico have benefited significantly from this trend. In Texas alone, clean energy employment now ranks second nationwide.

Cities like Dallas and Houston are emerging as hotspots for clean energy manufacturing and services, including EV component assembly, energy efficiency upgrades, and solar panel production.

Ripple Effects Along the U.S.-Mexico Border

The cross-border impact of these clean energy cuts is already being felt. With U.S. manufacturers pulling back on domestic expansion, Mexican suppliers and assembly partners face uncertainty.

Places like Ciudad Juárez, which partner with U.S. clean tech firms to assemble energy-efficient components and EV parts, are particularly vulnerable. The U.S.-Mexico clean energy supply chain has been a key driver of regional economic integration and cross-border job creation.

Yet, the slowdown in U.S. investments threatens to disrupt this dynamic. Clean energy trade between Mexico and the U.S., including the export of parts, final assembly, and shared workforce development programs, could suffer setbacks if investment momentum stalls.

Resilience and Continued Expansion

Amid the uncertainty, some firms continue to push forward. For example, T1 Energy has announced $850 million in funding for a new solar cell facility, complementing its existing 5 GW solar module gigafactory in Wilmer, Texas. The company expects to begin construction by mid-2025.

Even Kore Power, despite its canceled Arizona facility, is not abandoning U.S. manufacturing. Instead, it is exploring adaptive reuse of existing industrial properties to launch battery production faster and with lower upfront costs.

Long-Term Outlook: Opportunity or Retreat?

The future of clean energy investment in the U.S. hangs in the balance. Legal challenges to Trump-era reversals may temporarily reinstate some IRA-related funding, but industry leaders remain cautious.

In this climate of instability, Mexico may seize new opportunities to attract clean energy investment. Regions with skilled labor, strong infrastructure, and proximity to U.S. markets could become alternative sites for solar panel assembly, battery production, and EV parts manufacturing.

However, Mexico’s ability to capitalize depends on its regulatory environment, energy grid capacity, and binational trade alignment. Cross-border clean energy trade will remain a key variable in the resilience of the broader North American supply chain.

Conclusion: Navigating a Shifting Energy Landscape

The first quarter of 2025 has shown how quickly policy uncertainty can derail clean energy progress. With $8 billion in clean energy projects canceled, the sector must now adapt to a changed reality.

Whether the outcome is a temporary pause or a long-term retreat depends on both U.S. policy stabilization and Mexico’s strategic positioning. What’s clear is that clean energy investment, especially in cross-border contexts, remains vital to job creation, sustainability, and industrial growth on both sides of the border.