This article is sponsored by Wilmington Trust
Last year, renewable energy in the US was brought front and centre with the return of President Donald Trump. A change in administration meant a new attitude towards the energy transition, with several tax credits pulled back and traditional non-renewable asset classes gaining greater political backing.
Initially, there were fears that renewable power generation might enter a slump. But as time has passed, many worst-case scenarios appear to have been largely political noise. Will Marder, managing director of project finance at Wilmington Trust, discusses the performance of 2025, as well as why he feels optimistic about the year ahead.
How has the first year of President Trump’s return to office impacted investment in renewable energy infrastructure?
Will Marder
With so many policy signals to analyse, there was a lot of nervousness in the energy sector between election day and the inauguration. For instance, there was talk from President Trump about entirely repealing the Inflation Reduction Act. We all had to try and understand how realistic that was, what it could look like and the repercussions it could have. Ultimately, that didn’t happen, but at the time we didn’t know.
That said, there were developments in the past year that impacted the market. On the first day of his second term, President Trump introduced several executive orders targeting renewable energy.
Soon after, tariffs became a hot button, potentially impacting the costs of critical imported components. Many of those tariffs turned out to be fairly short-lived, and in hindsight were used more like tactical, temporary trade measures. But this still created uncertainty in the marketplace and put a pause on project finance in the US renewables sector.
Overall, in the first year, there’s been a limited impact on renewable energy. But some subsectors have fared better than others. For instance, several significant projects in the offshore wind space have been put on hold, with developers and sponsors delaying or re-evaluating projects. New financings in the onshore wind energy sector were also down significantly.
Meanwhile, areas like solar energy and battery storage remain robust. We also saw an uptick in activity from some of the biggest developers capitalising on safe harbour positions – they’d already qualified for tax credits, so they needed to act quickly to reduce the chance of those credits being repealed.
The One Big Beautiful Bill Act (OBBBA) inspired a lot of analysis and speculation. How has the market reacted since its introduction?
When it was first announced, there were fears that the OBBBA would derail the renewable energy sector, but that hasn’t materialised. When talking to market participants, many point out that they’d been through similar periods of policy overhaul before. The Production Tax Credit and Investment Tax Credit have been phased out and renewed numerous times over the past 25 years. Whatever happened, the market has chugged along and many market participants we spoke with indicated that they were confident they could ride it out.
There was some indication that developers with advanced projects would try and accelerate progress to take advantage of tax credits while they still could. There were also some discussions in the market as to whether or not developers would pivot to Canada or Latin America.
Generally, the market is bullish on renewables and the energy transition. This is being driven by the sheer economics, and there are limited alternatives to meet the growing demands of the market, which is currently being heavily impacted by a massive data centre build-out.
However, intermittency issues around renewables means they cannot support the immense power demands of data centres alone. AI is eating power for breakfast – and that’s forcing people to rethink nuclear power. It’s clean, it provides critical baseload power generation and it helps solve the reliability crunch that solar and wind can’t cover on their own.
A good example is Google, which has entered into an agreement with NextEra to bring a nuclear power plant in Iowa back online. They’re also investing in companies that are developing smaller-scale nuclear reactors. This could be the beginning of a nuclear renaissance in the US.
Nuclear is definitely back in the conversation, but one of the biggest hurdles right now is people. Most of the major build out in the US happened between the 1970s and early 1990s. A lot of the folks who ran those projects have either retired or are nearing retirement. In fact, industry groups are seeing companies actively trying to pull retirees back in just to help fill the gap.
Sentiment has changed around the energy transition, but to what extent do you see some of these investments withstanding the new narrative?
Generally speaking, I think the project finance market still believes in the energy transition – indeed, many market participants would say that we’re well and truly in the middle of it. However, one area experiencing a notable change in sentiment is electric vehicles. A couple of years ago, we saw a lot of transactions related to the onshoring of motor manufacturing and greater investment in batteries. There was a real push to develop supply chain capacity in the US.
Today, things have cooled a bit on this front and it’s down to the end user. In the beginning, everyone who wanted an EV went out and bought one. Now, I increasingly hear the wider public are reluctant to purchase until they see charging infrastructure more widely available. Ironically, the companies behind that charging don’t want to make the investment until the demand comes through in EV sales. We’re stuck with a chicken-and-egg situation, which is having industry-wide impacts. Some major automakers are pulling back and have taken losses on their EV business lines.
Beyond the use of renewable energy, where do you see some of the biggest long-term drivers shaping infrastructure in 2026 and beyond?
When you look at the geopolitical themes playing out, there’s an overarching need for greater energy independence. You can see how critical inexpensive power is to countries that haven’t developed other channels.
We’re also seeing huge demand for rare earth metals to help build batteries, motors and other advanced technologies. This has significant geopolitical implications.
On top of that, there’s a massive need for traditional infrastructure investment around roads, bridges, airports and clean water. We’ve seen this first hand and been involved in a number of project finance deals for port terminal facilities, for example.
What lessons or key takeaways from 2025 will be most useful for navigating markets in 2026?
What I find encouraging is the strong supply of capital in the market. This is driven by a feeling of resilience among market participants. We’ve seen that shift quite a bit over the years. The market has recovered from the biggest shocks to the financial system, whether we’re talking about the financial crisis or the pandemic. The market can react, and banks pull back and retrench. But in 2025, we saw a robust supply of capital from a range of sources. Not only have we seen capital coming in from traditional players, but also from non-bank providers like institutional investors and a huge surge in activity from direct lenders.
With that supply of capital, it’s a great time to be a borrower. This is because you have far more options for raising debt capital compared with a few years ago. Interest rates have been trending down, and the Federal Reserve is under growing pressure to continue lowering them. Against such a supportive background, we expect more mega-projects to come to market and to take advantage of the healthy supply of capital.
How significant is the AI and data centre theme? And what challenges do they represent?
AI is clearly a topic everyone is talking about. Last year, we saw a big uptick in data centre financings. These assets require vast amounts of power and that point is really starting to dominate the conversation. People used to talk about data centres as real estate transactions. This was chiefly because of the amount of land they needed. Now, data centres are talked about primarily in terms of how much power they require. It’s become primarily a power financing conversation, rather than a real estate one.
Last year, we worked on Meta and Blue Owl Capital’s $27 billion-financing deal for the Hyperion data centre. Meta’s flagship data centre is currently under construction in Louisiana. There are a lot of huge deals in the queue, but this financing is the largest private debt financing ever done. We were appointed in a variety of trustee and agency roles on that deal and are proud to have worked on it. The scale of data centre projects continues to grow, and this will drive the need for capital in the project finance market.