“2025 is the storm at night, and there were all these cross-cutting winds that hit the boat. The ones that came from the front are the tariffs and the tax changes and wind cancellations or pauses,” Alfred Johnson, cofounder and chief executive of the clean energy finance platform Crux, told me. “Then the tailwinds at the back were interest rates, the continuation of many [other tax credits] in the OBBBA — including storage credits, nuclear credits, manufacturing credits — and substantial demand coming for the electricity and the components. And when the storm cleared in the morning, the boat is further ahead in the water than you would have anticipated.”
That’s the bifurcated story Crux — a marketplace for tax equity, tax credits, and debt financing — is telling in its 2025 market intelligence report, released Tuesday. There were splits in when investment happened and in which sectors were favored. There were better and worse times for investment. And there were countervailing forces pushing on the clean energy market.
Here’s how Crux views the clean energy financing market as it enters an uncertain time.
A tale of two halves
Crux found a split in activity between the first and second halves of last year across a number of markets. A lot of that could be chalked up to investors trying to front-run a partial or full repeal of the Inflation Reduction Act, which became all but inevitable following the 2024 election.
Overall there was $120 billion worth of lending to “clean power, fuels, and manufacturing projects” in 2025. That’s more than in 2024, but still a “materially lower growth rate” — 5.8% year over year, compared to 22% in 2024.
“Investment activity was front-loaded during the first half of 2025,” the report found, peaking in the first three months of the year and then declining through “the second and third quarters “as some investors waited to see how debate over the OBBB would resolve itself.” There was capital to be raised throughout 2025, but it “became increasingly selective over the course of the year,” Crux found.
Some $63 billion of tax credits changed hands — but again, there was a slowdown in the second half of the year due to uncertainty around how the OBBBA affected the market. Similarly, pricing for tax credits softened in the second half of the year, and deals got smaller.
Demand is rising — for batteries
Solar and storage “continued to represent a dominant share of current-year spot tax credit activity in 2025,” the Crux report says, making up just over half of the tax credit market. While solar on its own made up just over a third of the market, “storage-linked categories expanded most rapidly on a percentage basis, led by standalone storage, followed by solar and storage,” the team found.
Citing data from the U.S. Energy Information Administration showing that utility-scale storage deployment grew 72% over the course of 2025, from 11 gigawatts to 19 gigawatts, Johnson told me that storage is “categorically booming.”
“Storage was a major outlier and source of growth,” he said. “We continue as a country to provide a lot of support on top of a lot of demand for batteries, and that, in our view, is going to lead to a lot of continued deployment in the battery sector.”
But what about EVs? The large batteries in electric cars are a major source of demand that help catalyze the battery supply chain from the lithium and cobalt to the battery cells and packs. While the EV market may be getting hammered by inconsistent policy, battery manufacturing is still going strong, Johnson said, thanks to the demand for energy storage.
“There was a lot of pearl-clutching about what would happen to the battery supply chain with less policy support and EVs being less in favor,” he told me. “What you have seen is some number of those battery manufacturers have rotated their delivery and their product into grid-connected battery storage because that market has so much demand in it. So you’re still seeing a lot of that demand flow through into the need for capacity.”
A bigger swath of corporate America is buying tax credits …
Crux found that nearly a quarter of the Fortune 1000 companies are participating in the tax credit market. Their rising participation “drove the aggregate growth in the market and supported pricing despite rising market uncertainty following passage of the OBBB,” the report found.
When the market was just tax equity deals, in which investors partner directly with developers on a project in exchange for the value of the tax credits, it had only “a few dozen participants,” Johnson said. By 2023, a year after the Inflation Reduction Act allowed for those credits to be traded on third-party platform, it had around 50, he told me. Now that number is closer to 250.
“It’s becoming a more common part of the tax planning and cash management strategies that large companies are deploying,” Johnson said, pointing to data showing that tax credit buyers had effective tax rates three percentage points lower than non-buyers.
… but they’re picky about which ones
The Internal Revenue Service rolled out final rules for a new set of production and investment tax credits — the so-called tech neutral tax credits that applied to “any clean energy facility that achieves net-zero greenhouse gas emissions,” not just specific technologies chosen by Congress — in early 2025, just before the Biden administration left office.
Since then, these credits “have entered a choppy market,” the Crux report says.
“Crux’s survey of tax equity sponsors shows that most have limited investment in projects claiming the tech-neutral … credits,” which it attributed to concerns around stringent source requirements companies related to so-called foreign entities of concern must meet to claim these newer credits compared to the legacy investment and production tax credits.
Crux found modest but still measurable discounts for the tech-neutral tax credits compared to their predecessors of about 1 to 2 cents on the dollar for newer projects. (Projects that started construction before the end of 2024 were still eligible for the legacy credits.)
When talking to tax equity investors, Crux found that just 10%“reported actively pursuing tech-neutral tax credits,” while 90% said they would “only look at these credits under certain circumstances.”
“It’s mostly a comfort thing,” Johnson said. That may yet abate — he pointed out that “you saw preference in the early market for wind and solar credits versus advanced manufacturing and fuels and nuclear,” as new credits were developed, but eventually the market became more comfortable with funding new technologies and working with new credits, Johnson said.
“The new guidance that came out from the department on FEOC answers some of those questions,” Johnson said. “We think that that will drive some amount of additional market volume.”
Courtesy of Climate Central
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