Policy uncertainty leads to $1.4 billion cancelled U.S. manufacturing investments in May

Republican districts are hit the hardest, with more than $9 billion in investments cancelled, delayed or closed so far in 2025, as businesses react to House and Senate bills that propose an early end or elimination of tax credits, according to E2.

June 23, 2025 Anne Fischer

Meyer Burger filed for insolvency, lays off over 900 workers.

Image: Meyer Burger

The United States experienced a surge in industrial production in the past three years as a result of passage of the Inflation Reduction Act. However, that may change as the U.S. Senate prepares to vote on a massive tax and spending bill that would increase taxes on clean energy factories and projects, according to a report by E2, a bipartisan group that tracks clean energy economics in its Clean Economy Works report.

Solar manufacturing alone accounted for announced investments of $45.8 billion, according to the Solar Energy Industries Association (SEIA), since federal manufacturing policies were enacted in 2022. SEIA reported that $9.1 billion of these manufacturing facilities are operational, $15.6 billion are under active construction, and another $21.1 billion manufacturing investments are under development.

In May alone, $1.4 billion in new factories and clean energy projects were canceled or in jeopardy of being canceled, according to the latest monthly analysis of clean energy projects tracked by E2 and Clean Economy Tracker. Among the recent factory cancelations are REC Silicon, Kore Power and Meyer Burger. E2 reported that the projects canceled in May were expected to create at least 1,000 new jobs. In addition, 600 workers were laid off across five closures announced in May.

In the first five months of 2025, E2 reported that the cancelations, which include solar module as well as battery and electric vehicle (EV) facilities, totaled $15.5 billion in investments and were expected to create 12,000 new jobs.

The federal legislation in 2022 extended the 45X Advanced Manufacturing tax credit through 2034, but that may change if the Senate proposed bill passes as it ends 45X one year earlier and brings uncertainty due to restrictions on sourcing from Foreign Entities of Concern (FEOC). The draft proposal goes to the full Senate for a vote and then back to the House.

Republican congressional districts have fared well since passage of the 2022 legislations with clean energy manufacturing facilities as well as solar and wind energy installations. E2 reported that through May of this year, 62% of all clean energy projects announced, along with 71% of all jobs and 82% of all investments, are in congressional districts represented by Republicans.

The E2 report noted, however, that these districts are losing the most with more than $9 billion in investments and almost 10,000 jobs already canceled, delayed or closed in Republican districts so far in 2025.

“The consequences of continued policy uncertainty and the expectation of higher taxes on clean energy businesses are becoming painfully clear. Businesses are reacting to the Senate’s proposal — like the House’s — that would drastically scale back the very tax credits that had been driving an American energy and manufacturing boom,” said Michael Timberlake, E2 communications director. “These cancellations are just the first shoe to drop. With renewable energy supplying more than 90 percent of new electricity in America last year, canceled projects will likely mean less available energy and higher electricity prices for consumers and business alike.”

While cancelations abound, businesses also announced in May nearly $450 million in investments for new solar, EV, and grid and transmission equipment factories across five states, the report said. This includes Rivian’s $120 million investment to build a 1.2 million-square-foot EV supplier park in Illinois, which is expected to create 100 new jobs. E2 reported that, combined, the eight projects announced in May are expected to create at least 1,310 new permanent jobs if they are completed.

E2 reported that the May announcements bring the overall number of major clean energy projects it tracks to 397 across 42 states and Puerto Rico. Company announcements for these investments total to nearly $132 billion and 123,000 permanent workers. (Note that these figures reflect ongoing revisions and updates.)

A full map and list of announcements is available at e2.org/announcements. E2 will incorporate cancelation data in the coming months.

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