Challenges in Renewable Energy Capital Markets

This technical report examines the challenges facing the renewable energy sector in capital markets, particularly in light of the One Big Beautiful Bill Act (OBBBA). It outlines the decline in equity capital commitments for energy transition projects, which fell from a peak of $168 billion in 2021 to $51 billion in 2024. The report details how the OBBBA alters the tax credit landscape, compressing timelines for project development and introducing stricter compliance rules. It highlights the implications of foreign entity restrictions on financing and the increased risk of project delays. The report also discusses the uneven impacts across different renewable technologies, noting that while wind and solar face significant challenges, other technologies like standalone storage and hydrogen may fare better. Investors are advised to consider execution risks and long-term demand for clean power when evaluating projects under the new regulatory framework. The report emphasizes the need for careful structuring and enhanced due diligence in financing renewable projects moving forward.