Changes in federal policy and tariffs are causing some organizations to hold back on renewable energy investments. This slowdown could pose challenges for Maryland’s climate goals. 

​In the first quarter of 2025, global corporate funding for solar companies declined 41% year-over-year, while energy storage companies experienced an 81% drop in funding, according to Mercom Capital Group. This downturn is attributed to uncertainties surrounding the future of the Inflation Reduction Act (IRA), renewable energy tax credits, tariffs, and supply chain concerns. Such uncertainties have stalled many financing deals, as parties are unable to reliably calculate potential returns. Raj Prabhu, CEO of Mercom Capital Group, warns that without clear policy direction from Congress, the renewable energy industry could face a sector-specific recession due to stalled activity. ​

Investor interest in renewable energy had begun to wane even before the 2024 election, coinciding with the rising popularity of then-candidate Donald Trump. The lack of clarity on key elements of U.S. energy policy, rather than specific positions, has contributed to this cooling interest. While some venture capital deals continue for particularly innovative companies, the broader market remains in a “wait and see” mode. Notably, public market funding for solar companies plummeted 99% compared to the first months of 2024, totaling just $20 million. Similarly, smart grid companies saw a 23% drop in funding year-over-year.

This decline in investment means companies will likely face more barriers to securing financing for new projects in Maryland and nationwide. While somewhat off track already, the state’s goal of achieving 14.5 percent renewable energy from solar by 2030 may become even more difficult if securing capital and equipment becomes that much harder.

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