Since returning to office in 2025, President Donald Trump has set the U.S. on a dramatically different energy policy path. His administration has begun dismantling key components of the Inflation Reduction Act (IRA), which was originally designed to support the transition to clean energy. This shift is having real consequences for companies across the U.S. and abroad, particularly when it comes to energy costs.
While the IRA previously gave businesses long-term certainty with clean energy tax credits and subsidies, the Trump administration has re-centered policy on fossil fuel production and deregulation. This reversal is increasing market uncertainty and driving up energy costs for many firms. In this article, we break down how these policy changes are affecting business operations and how companies can prepare.
The IRA, passed in 2022, was the most ambitious climate legislation in U.S. history. It supported investment in renewable energy, electric vehicles, and carbon capture technologies through long-term tax credits and grants. Businesses responded by shifting procurement strategies, investing in sustainability, and locking in lower long-term energy prices.
However, under President Trump, that momentum has slowed. His administration has moved quickly to:
Pause or repeal key IRA tax credits
Restart oil and gas drilling on federal lands
Weaken environmental regulations enforced by the EPA
Step back from international climate cooperation
This policy pivot has reduced incentives for clean energy development and introduced more uncertainty into the energy market.
Without IRA subsidies, clean energy projects like solar and wind are slowing down. This is reducing electricity supply and driving prices higher. The U.S. Energy Information Administration (EIA) estimates that if key IRA provisions are rolled back, average electricity prices could rise by up to 12% by 2030—costing businesses an extra $45 billion.
At the same time, energy demand is rising sharply, especially due to the growing use of AI. McKinsey projects that U.S. data centers will consume 606 TWh of electricity by 2030, up from 147 TWh in 2023—nearly 12% of national demand.
This combination of higher costs and rising demand is putting pressure on companies, especially those with long-term energy contracts based on IRA incentives. Many of these deals are now being reviewed or canceled.
Clean energy manufacturing is also being hit. According to Reuters, nearly $8 billion in clean tech projects were delayed or canceled in early 2025 due to policy uncertainty.
While deregulation may offer short-term savings for fossil fuel users, it increases long-term risks. The IEA warns that delaying clean energy investment now will lead to higher prices and instability in the future.
Even as federal support for clean energy wanes, companies still have ways to reduce risk and manage rising energy costs:
1. Diversify energy sources Businesses should look beyond federal policy and consider partnerships in states that maintain strong clean energy programs. States like California and New York continue to offer incentives for renewable energy projects.
2. Improve energy efficiency Investing in energy-saving technologies, equipment upgrades, and smart building systems can reduce overall consumption and protect against price increases. To manage risk, performance-based contracting is often an available option.
3. Stay engaged with policy developments Companies should monitor regulatory changes closely, especially Treasury and IRS guidance on what remains of the IRA. Legal consultation can help navigate evolving compliance rules.
4. Focus on transparency and resilience Despite federal policy shifts, international expectations on climate disclosure remain high. Aligning with global standards like TCFD or CSRD can preserve access to green financing and help manage reputational risk.
The IRA was designed to provide long-term stability for clean energy investment. Under the current administration, the policy landscape has shifted, bringing new variables and potential changes in cost structures. While fossil fuel production may expand in the near term, global efforts toward decarbonization continue to influence market direction.
For companies, the key is to remain flexible and forward-looking. By investing in efficiency, engaging with state-level programs, and planning for long-term energy resilience, businesses can navigate this shifting landscape—and still make progress on sustainability and competitiveness.
References:
The G20 Energy Declarations serve as a key platform for international coordination on clean energy, offering non-binding yet influential guidance that shapes investment flows, policy frameworks, and equitable transition strategies worldwide.
