Trump's Energy Policy and the Risks for Renewable Investment: A Deregulatory Dilemma

The U.S. energy landscape is undergoing a seismic shift under the Trump administration, driven by a clear and deliberate pivot toward fossil fuels and deregulation. This policy agenda, rooted in the conservative blueprint of Project 2025, has introduced profound risks for renewable energy investors. By dismantling federal support for clean energy, imposing protectionist tariffs, and prioritizing coal and natural gas, the administration is reshaping the energy sector in ways that could destabilize long-term investment in sustainability.

Regulatory Rollbacks and the Erosion of Clean Energy Momentum

The Trump administration has moved swiftly to reverse climate and energy policies from the previous administration. Executive Order 14261, issued in April 2025, reclassified coal as a "mineral" and suspended key emissions standards for coal-fired plants, signaling a revival of the fossil fuel industry : Trump Administration Executive Actions Mark Broad Rollback of Climate and Clean Energy Directives^[1]. Simultaneously, the Department of Energy has canceled over $6.8 million in clean energy grants and is reviewing 300 additional projects for termination, including initiatives for low-income housing efficiency and EV carsharing : Trump administration cancels clean energy grants as it prioritizes fossil fuels^[2]. These actions reflect a broader strategy to deprioritize renewables, with the administration halting permits for onshore and offshore wind projects and withdrawing federal funding for solar initiatives : Solar executives say Trump attack on renewables will lead to^[3].

The implications are stark. According to a report by Arnold Porter, the cancellation of these grants has forced firms like Engie North America to cut planned investments by 50%, citing rising costs from tariffs and regulatory instability : Solar executives say Trump attack on renewables will lead to^[3]. The Inflation Reduction Act (IRA), which had provided critical tax credits for renewables, now faces an uncertain future as the administration pauses disbursements under its programs : President Donald J. Trump’s Executive Orders and^[4]. This has led to a doubling of solar power prices to $60 per megawatt-hour, with further increases projected as tax credits expire : Solar executives say Trump attack on renewables will lead to^[3].

Copper Tariffs and the Cost Conundrum

A particularly acute risk for renewables stems from the administration's 50% tariff on copper imports, effective August 1, 2025. Copper is a linchpin for solar and wind infrastructure, with each megawatt of solar capacity requiring 5 tons and offshore wind installations using up to 15 tons per megawatt : Trump's 50% Copper Tariff: Impact on Markets & Industries^[5]. The tariff, which excludes raw materials but targets semi-finished products, has already driven U.S. copper prices sharply higher than global benchmarks, creating arbitrage opportunities but straining manufacturers : Trump's 50% Copper Tariff: Impact on Markets & Industries^[5].

Data from Discovery Alert indicates that the U.S. consumes 1.6 million tons of refined copper annually but produces only 850,000 tons domestically, making it heavily reliant on imports from Chile, Canada, and Mexico : Trump's 50% Copper Tariff: Impact on Markets & Industries^[5]. The tariff has triggered a pre-implementation stockpiling of copper, exacerbating short-term supply imbalances and logistical bottlenecks : Trump's 50% Copper Tariff: Impact on Markets & Industries^[5]. While domestic producers like Freeport-McMoRan may benefit, the structural limitations of U.S. mining—permitting delays, high capital costs, and environmental regulations—mean that scaling up production to meet demand will take years : Trump's 50% Copper Tariff: Impact on Markets & Industries^[5].

Investor Implications: A Sector in Peril

For investors, the combination of regulatory rollbacks and material cost shocks presents a dual threat. The renewable energy sector, already grappling with grid constraints and AI-driven demand surges, now faces a hostile policy environment. According to CNBC, solar executives warn that the administration's actions could lead to a "systemic collapse" of the industry, with project costs rising to levels that undermine competitiveness : Trump's 50% Copper Tariff: Impact on Markets & Industries^[5]. Meanwhile, the administration's focus on nuclear energy—while potentially offering long-term opportunities—remains speculative, with 10 new reactors by 2030 contingent on technological and regulatory breakthroughs : Trump Administration Executive Actions Mark Broad Rollback of Climate and Clean Energy Directives^[1].

Conversely, fossil fuel and copper producers stand to gain. The resumption of LNG export permits and the lifting of Alaskan energy restrictions are likely to boost oil and gas stocks, while domestic copper firms benefit from inflated prices : Solar executives say Trump attack on renewables will lead to^[3]. However, these gains come at the expense of a sector that had been central to decarbonization efforts, raising questions about the administration's commitment to energy security in the face of climate risks.

Conclusion: Navigating the New Energy Normal

The Trump administration's energy policy is a masterclass in deregulatory ambition, but its consequences for renewables are undeniable. By prioritizing short-term gains for fossil fuels and domestic copper producers, the administration risks undermining the long-term viability of clean energy investments. For investors, the path forward requires a nuanced approach: hedging against regulatory volatility while capitalizing on pockets of growth in sectors aligned with the administration's agenda. Yet, as history has shown, energy transitions are rarely reversed without enduring consequences.