As President Donald Trump races to dismantle his predecessor’s climate policies, green shoots are popping up throughout the economy.
Solar power generation surged in the first half of 2025, a growing number of batteries were connected to the grid, and electric vehicles sales hit new records. The boom is owed in large part to the Inflation Reduction Act, the sweeping climate law signed in 2022 by then-President Joe Biden. The growth in clean energy shows how the economy has responded to the law’s tax incentives — and what could be lost when Trump’s rollbacks are complete.
Solar is one example. Generation is up 32 percent through the first six months of 2025 compared to the same time last year, according to preliminary data by the U.S. Energy Information Administration. The gains are even greater — 99 percent — compared to the first half of 2022, just before the Inflation Reduction Act was signed. The surge in solar installations led to almost 20 gigawatts of new capacity in 2023 and about 31 GW last year, shattering previous records. EIA expects that another 24 GW of solar capacity will be plugged in before this year is over — adding to the 10 GW that has already been installed.
“I think the IRA was doing what it intended,” said Ryan Jones, the co-founder of Evolved Energy Research. “That increase in solar can’t be accounted for in the cost of projects over the last couple of years.”
Similar trends have been observed with EVs and batteries. Storage developers connected 4.6 GW of new battery to the grid through May, according to the latest federal data. That would have been an annual record as recently as 2022. EV sales in the first half of 2025 hit a record 607,000 vehicles, an increase of 1.5 percent over 2024. Take out sales associated with Tesla, which has slumped, and the purchase of electric cars has risen by more than 14 percent this year, said Stephanie Valdez Streaty, an analyst at Cox Automotive.
She noted that the average transaction price of EVs has trended down, but that they still cost more than gasoline-powered vehicles — a challenge that the climate law was designed to address.
“The IRA was a way to bridge that gap,” Valdez Streaty said.
That will soon be over.
Incentives for EVs will be gone in October under the One Big Beautiful Bill Act, which Trump signed into law earlier this month. Valdez Streaty predicts EV sales will surge in the third quarter of the year, then plunge in the fourth quarter. Cox Automotive initially projected EVs would account for 10 percent of new sales this year, but it downgraded that estimate to 8.5 percent after the Republican law was finalized.
Tax credits for wind and solar will stick around a bit longer. Projects that are under construction before July 4, 2026, are likely to qualify for Inflation Reduction Act subsidies through 2030, though the Treasury Department may tighten its rules for what constitutes the start of construction. Projects that break ground next year after July 4 will need to be operating by the end of 2027.
EIA estimates that solar installations would fall from 36 GW in 2027 to about 18 GW in 2028, and less than 5 GW in 2029. Wind projects, which were already struggling with transmission constraints and growing opposition, are in tougher shape. Onshore wind installations are expected to fall from 8 GW in 2026 to 3 GW in 2027, and a little more than 2 GW in 2028.
“Solar and wind, in particular, are hit pretty hard in the 2028-2035 time frame,” Jones said.
Outside of renewables, the power sector saw a reversal of recent trends over the first half of 2025. Natural gas generation, which has steadily risen in each of the last four years, fell 4 percent compared to the first half of 2024. The change is due to higher gas prices after cold temperatures increased demand in the first part of 2025. That in turn has helped coal, which experienced a 14 percent jump in the first six months of 2025. It was coal’s best first-half start since 2022.
Yet in a sign of how much coal use has fallen over the years, renewables still generated more electricity during that six-month period.
