Trumps cash freeze is making clean energy projects collapse
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Last year, when an apple orchard in rural Washington State invested in new cold storage equipment, the price was steep$187,000. The farm had won a USDA grant that was supposed to cover half of the cost of the technology, which is being shipped to the farm now. But after the Trump administration paused spending on energy grants and loans, the farmers are questioning whether theyll ever be paid back.The project will save the orchard thousands each year on energy bills, and the benefits extend beyond the orchard itself: The equipment can save 500 megawatt-hours of energy each year, or roughly as much electricity as a million-dollar solar farm could generate. In an area where data centers are proliferating and sucking up power, the energy efficiency could play a meaningful role in supporting the electric grid.The grant was one of dozens that a startup called Zero Emissions Northwest helped farmers and rural business owners secure through the USDA over the last 15 months. The projects were designed to help rural businesses save money by saving energy, using American-made equipment, from heat pumps to a Chevy Silverado EV that would save a farmer $12,000 a year in fuel costs.The USDA funding was one piece of the Inflation Reduction Act, which Congress passed in 2022 with bipartisan support. But because Trump signed an executive order on his first day that paused any spending through both the Inflation Reduction Act and Bipartisan Infrastructure Law for 90 days, some of the projects may never happen. Other business owners with projects underway, like the apple orchard, are now stuck with bills that they cant afford.Some people are very frustratedtheyve spent $100,000 on a project, and they were expecting to get paid this month, and they havent, says David Funk, founder and president of Zero Emissions Northwest.The grantwriting startup had been growing quickly over its 1.5-year existence. Before Trump took office, the startup submitted invoices for work that it had done in the last quarter of 2024; it had previously been told by government officials that grants that were already committed would be paid. But last week, it learned that the funding for its own operations was frozen. Funk was forced to furlough his employees. (The company is a contractor for USDA, and gets paid a fee by its clients only if they win a grant.) A long list of other companies are also being affected by the pause in funding. One source told me about an early-stage mapping startup that had won multiple different grants to bring its product to market; now it plans to shut down. (The startup didnt respond to a request for an interview.) Several companies said they werent ready to talk publicly. We cant even predict whats going to happen at this point, one startup founder said. All of the rules that we abided by in the past just went out the window.Thats true both for small startups, like Zero Emissions Northwest, and larger companies with infrastructure projects that are underway or poised to begin. The uncertainty of clean energy tax credits adds to the challenge.The impacts are huge, says Bob Keefe, executive director of E2, a national, nonpartisan group of business leaders and investors with a focus on both the environment and the economy. Youre starting to see some companies cancel projects. One E2 member with an EV charging company told Keefe that the company would likely have to furlough some staff and give other employees pay cuts. They quite literally may be going out of business, he says. The company went to six different banks to try to get a bridge loan, but all of them turned it down because of the uncertainty in the market. The funding freeze created significant uncertainty, which is of course bad for business in the short term, but it also undermines business confidence in the long term, says Tyler OConnor, a partner at the law firm Crowell who focuses on energy. The first executive orderfollowed by multiple memos, including a pause on all federal grants and loans that was later rescindedhas caused confusion throughout the energy industry, he says. (The vague phrasing of the original executive order means that it also may impact projects that have nothing to do with clean energy, such as bridge repairs that were funded by the Bipartisan Infrastructure Law.)Still, some companies are more optimistic than others; the type of energy technology makes a difference. Plug Power, a company that makes green hydrogen and was awarded a $1.66 billion loan guarantee in the last days of the Biden administration, expects that it will still be able to move forward with building a new facility in Texas later in the year. I dont think hydrogen is as controversial as some other technology, says CEO Andy Marsh. Maybe if I was building a wind plant or EV charging stations, Id be more concerned. Hydrogen is liked by oil and gas people.Most Americans support clean energy like low-cost wind and solar power. Trump opposes wind, in particular; hes also trying to fight the growing adoption of electric vehicles. Stopping wind development will make energy bills higher, and slowing down EV production will make the U.S. fall farther behind competitors like China, Manish Bapna, president and CEO of the nonprofit NRDC, said in a statement. Nobody voted for this, but somebody else asked for it: thebillionaire oil and gas donors Trump solicitedto help bankroll his campaign, Bapna wrote.With the shift in federal policy, some companies are beginning to talk about their work differently: Instead of talking about climate change, theyre focusing on the other benefits that they provide, from energy security to creating jobs. We talk a lot about securing supply chains, says Daniel Goldman, a managing partner at the VC firm Clean Energy Partners. Companies like Nth Cycle, which does critical minerals recovery from recycled materials, are super important to develop in North America so were not dependent on Chinas critical mineral supply.Now, some of the companies that are being affected are pushing for political support. Zero Emissions Northwest is encouraging its customersmany of whom voted for Trumpto contact their local representatives and share their stories. E2 is bringing hundreds of company leaders to D.C. to lobby Congress to support clean energy tax credits, another policy that will be critical to whether some companies survive and grow.Theres not a lot of reason for optimism right now, unless Congress steps in and does something in the next couple of weeks to reassure corporate America that we can get this country moving in the right direction again, Keefe says. More than 350 major clean energy projects are underway or in planning across the country, with 112,000 jobs at stakemany in red districts. Hopefully there are some people in Congress who can realize the risks to our economy, to their districts, to working class Americans, and do the right thing, he says.
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