(Oil Price) – It’s been a volatile year for clean energy markets. Despite major policy shifts impacting green industries, global renewable energy investment hit a record high in 2025.
A closer look at last year’s figures reveals a high level of ambivalence in the marketplace, with a sharp drop in clean energy investments in the United States in the last corner, but a surprising resurgence of clean energy dealmaking over the same time frame.
The electric vehicles sector, in particular, is already showing signs of sharp contraction after the Trump administration ended a Biden-era EV tax credit last fall. Globally, EV manufacturers have registered a combined $65 billion in write-offs since the $7,500 U.S. federal tax credit was rolled back in September, with major automakers like Ford and Stellantis reporting hefty losses and EV program cancellations. In the United States, the drop in electric vehicle sales was the primary driver of the biggest quarterly drop in clean energy investing that the country has seen in almost a decade.
While clean energy investing was strong overall in 2025 in the United States, reaching a record annual high of $277 billion, the numbers for the fourth quarter are grim. A reported $8 billion in clean energy projects were scrapped, and just $3 billion worth of new projects announced. “That means the pipeline of new investment is shrinking,” Hannah Hess, associate director of climate and energy for the Rhodium group, recently told nonpartisan news outlet Semafor. “Usually, even when we see quarterly fluctuations, from a zoomed-out view we continue to see sustained momentum. That’s no longer true.”
And the EV investing and clean energy investing drop is likely to continue as the Trump administration ramps up its climate policy rollbacks. Earlier this month, the administration delivered “one of the single largest deregulatory actions in U.S. history” when it ended the 2009 law classifying carbon dioxide as a threat to public health, kneecapping regulators’ ability to set emissions caps.
However, Bloomberg reports that there are signs of a coming resurgence in private equity dealmaking in the clean energy sector after a year characterized by extreme policy uncertainty. Last year saw a plummet in clean energy acquisitions, with a more-than 50 percent year-on-year contraction. In fact, numbers dipped down to 2013 levels, effectively erasing over a decade of growth.
But there are several reasons that we can expect a market correction in 2026. “Power demand from artificial-intelligence data centers continues to boost investment in renewables, with US data-center electricity consumption projected to triple by 2035 from 2024 levels,” Bloomberg reports. “At the same time, last year’s slowdown has forced developers and asset owners to reassess valuations.” While dealmaking is on the rise, the sector has a whole lot of ground to recover.
While clean energy investing in the United States fell 36 percent from the second half of 2024 in response to the rapidly shifting policy landscape, global numbers are looking stronger than ever. Worldwide, investments in creating new renewable energy production capacity reached a record $386 billion in the first half of 2025. This growth was primarily driven by offshore wind and small-scale solar development.
Markets in the developing world are showing huge growth in terms of clean energy deployment and electric vehicle adoption. As it has become an affordable and accessible option, small-scale solar has boomed in resource-constrained economies like Pakistan and much of sub-Saharan Africa.
“Markets with supportive revenue mechanisms have maintained momentum on renewable energy investment,” says Meredith Annex, Head of Clean Power at BloombergNEF. “Whereas projects in markets where revenue certainty is shifting, particularly when it’s down to large swings in policy as in the US or mainland China, are seeing a boom-bust cycle ahead of those changes.”
By Haley Zaremba for Oilprice.com
