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Uncertainty about Congress and the Trump administration has investors a little shook.

The Inflation Reduction Act’s fate will soon be decided by a Republican-controlled Congress, and the market the law built up to fund its signature clean energy markets is on edge, even if there’s still brisk business being done.
Before the IRA, to claim a clean energy tax credit essentially required having an actual investment interest in a project. One of the biggest changes of Biden’s climate law, however, was to make those tax credits transferable, meaning that if a developer itself didn’t have a large tax liability, it could transfer — i.e. sell — those credits to someone who did. This fed what quickly became a thriving market connecting developers and owners of clean energy projects with tax equity investors who buy the credits to reduce their own tax bills.
Much of the clean energy business relies on this structure to fund its activities. So when the investment bank Jefferies issued a note late last week on the residential solar company Sunnova — whose share price is down over 80% in the past year and 70% since the 2024 presidential election — arguing that the tax equity market as a whole had “tightened,” and that it expected Sunnova to post below-expectations earnings due to the “increasingly tightening tax equity market that we believe has constrained NOVA’s ability to raise tax equity financing in the near term,” the market reacted. The company’s shares dropped around 7% on Friday, and are down about a fifth since close of trading on Thursday.
The note wasn’t just a ding against Sunnova, though. It also raised a red flag for the tax credit market as a whole. “Our industry conversations increasingly suggest a tightening in the market as usual tax credit buyers/investors pause on transacting in response to growing uncertainty on anything IRA related under the new Trump administration," the Jefferies analysts wrote in the note. “We perceive traditional buyers/investors have moved to the sideline and are awaiting clarity from the Trump administration, resulting in a slow-down in the tax equity capital markets.”
On Monday, the Jefferies analysts appeared to rollback their assertion. “Investors disagreed and referenced a strong/robust market, thereby prompting questions of whether constrained tax equity capital is limited to NOVA or if it's a broader market issue after all. We note that we have not heard any issues with raising tax equity from [Sunrun, the country’s largest residential solar company],” they wrote. “We appreciate [that the] market is intact.”
A Sunnova spokesperson declined to comment on the Jefferies commentary, citing the “quiet period” before the company announces earnings in early March.
Based on market data and conversations with market participants, the industry also seems to see an “intact” market, though perhaps one with weakness or holes in specific sectors (such as residential solar), even if sources I talked to didn’t want to speculate specifically about any one company.
Research by the tax credit marketplace Crux shows that there were $30 billion worth of tax equity deals in 2024, $6 billion of which included some kind of forward commitment — either agreeing to purchase future investment tax credits or a portion of production tax credits that accrue over time.
“With the presence of a forward commitment, it is much easier for the seller, the developer, to procure financing at lower costs because they have a commitment for the tax credit,” Alfred Johnson, the co-founder of Crux, explained to me. “So that is lowering the cost of capital for projects that will be delivered sometime far in the future.”
Johnson told me that these forward commitments were a “really positive dynamic” for areas like geothermal and nuclear, which “require a lot of future investment.”
“It does suggest that people are taking a multi-year view of the importance and viability of the [transferability] program,” Johnson said.
And if there are major changes to the IRA’s tax credit regime — whether Congress decides to scrap it entirely or restrict it to forms of power generation more favored by Republicans and the Trump administration, such as geothermal and nuclear — Johnson notes that “Congress has rarely, if ever, made a retroactive change with an adverse impact to the taxpayer.”
“I think the fact that buyers are engaging quite actively in the market across credit types is indicative of the view that they believe that the market will remain viable and important for this year and for near future years,” Johnson added.
But just because changes to the IRA may not affect current deals doesn’t mean that the industry isn’t nervous. “Grandfathering is a longstanding practice that we expect to continue,” Jack Cargas, head of originations on the tax equity desk at Bank of America, said on a podcast hosted by the law firm Norton Rose Fulbright. “We are cognizant that neither Republicans nor Democrats are going to act in a way that jeopardizes their constituents’ interests or livelihoods, however we expect a slowdown in financing for projects on which construction starts in 2025 until it is clearer what Congress will do.”
There may also be questions about projects that start this year.
“I have not actually seen any deals derailed over change of law concerns, but also everything I'm working on at the moment began construction before the end of the year,” David Burton, a partner at Norton Rose Fulbright, told me.
Burton said his clients are focused on getting deals started and done so that they can be “grandfathered” into any changes of the tax credit system. “We are counseling sponsor clients to begin construction under the tax rules as soon as they can,” Burton said.
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Rob and Jesse touch base with WeaveGrid CEO Apoorv Bhargava.
Data centers aren’t the only driver of rising power use. The inexorable shift to electric vehicles — which has been slowed, but not stopped, by Donald Trump’s policies — is also pushing up electricity use across the country. That puts a strain on the grid — but EVs could also be a strength.
On this week’s episode of Shift Key, Rob and Jesse talk to Apoorv Bhargava, the CEO and cofounder of WeaveGrid, a startup that helps people charge their vehicles in a way that’s better and cleaner for the grid. They chat about why EV charging remains way too complicated, why it should be more like paying a cellphone bill than filling up at a gas station, and how the AI boom has already changed the utility sector.
Shift Key is hosted by Robinson Meyer, the founding executive editor of Heatmap, and Jesse Jenkins, a professor of energy systems engineering at Princeton University.
Subscribe to “Shift Key” and find this episode on Apple Podcasts, Spotify, Amazon, YouTube, or wherever you get your podcasts.
You can also add the show’s RSS feed to your podcast app to follow us directly.
Here is an excerpt from our conversation:
Robinson Meyer: In your experience, are consumers willing to make this deal, where they get some money off on their power bill in order to change how their car works? Because it does seem to include a mindset change for people, where they’re going from thinking of their car as a machine — I mean, this is part of the broader transition to EVs. But there’s an even further mindset shift that seems to me like it would be required here, where you go from thinking about your car as a machine that you wholly own — that enables your freedom, that is ready to drive a certain amount of miles at any time — to a machine that enables you to have transportation services but also is one instantiation of the great big cloud of services and digital technologies and commodity energy products that surround us at any time.
Apoorv Bhargava: Yeah, I mean, look, I think we have seen faster adoption rates than any other consumer-side resource participating in energy has. So I feel very good about that. But ultimately, I think of this as a transition to the normal experience for folks who are going through what is a new experience altogether.
Again, similar to my cell phone plan, if this was just offered to me as a standard offering — you buy an EV, your utility offers you a plan, it’s called the EV plan — in the same way that we have EV time-of-use rates, quote-unquote. If you’re just offered an EV plan where it’s exactly the same thing — I’m going to make sure you’re fully charged every night in the way you want it to be charged, with the cleanest, cheapest, most reliable charging possible, and it’s just being taken care of.
I think what’s so hard for most folks to grok, is that the way this experience works is it’s supposed to be completely frictionless, right? You’re really supposed to not think about it. It’s actually only in the few moments where you need to change your 99% behavior to the 1% behavior — where you’re like, Oh, I need to go to the airport, or, Oh, I need to go on a road trip. That’s where you need to think about it. It’s flipped from thermostat management programs where you actually need to think about it actively in the moments where the grid is really strained.
Where we’ve overinvested, in my view —and this is a controversial view — we’ve overinvested in trying to make EVs be like gas stations or like the gas station model. We keep talking about it all the time. We’ve over-talked about range anxiety. The fact of the matter is 80% of charging still happens at home. Even in the long run, 30% of charging will happen in the workplace. 50- plus-percent will happen at home. It’s very little charging that’s gonna happen on fast charging. But we’ve talked so much, ad nauseam, about fast charging that we’ve actually forgotten that underpinning the iceberg of the electrification cost is the grid itself. And never before has the grid been so strained.
Mentioned:
Rob on how electricity got so expensive
Utility of the Future: An MIT Energy Initiative response to an industry in transition, December 2016
Previously on Shift Key: Utility Regulation Really Sucks
Jesse’s downshift; Rob’s upshift.
This episode of Shift Key is sponsored by …
Hydrostor is building the future of energy with Advanced Compressed Air Energy Storage. Delivering clean, reliable power with 500-megawatt facilities sited on 100 acres, Hydrostor’s energy storage projects are transforming the grid and creating thousands of American jobs. Learn more at hydrostor.ca.
Uplight is a clean energy technology company that helps energy providers unlock grid capacity by activating energy customers and their connected devices to generate, shift, and save energy. The Uplight Demand Stack — which integrates energy efficiency, electrification, rates, and flexibility programs — improves grid resilience, reduces costs, and accelerates decarbonization for energy providers and their customers. Learn more at uplight.com/heatmap.
Music for Shift Key is by Adam Kromelow.
The self-described “ecosocialist” ran an ultra-disciplined campaign for New York City mayor. Once he’s in office, the climate issue could become unavoidable.
Zohran Mamdani, the New York state assemblyman, democratic socialist, and Democratic nominee, was elected mayor of New York City on Tuesday night.
Many factors fueled his longshot rise to Gracie Mansion — a congested primary field, a gleam-in-his-eyes approach to new media, and an optimistic left-wing worldview rendered newly credible by global tumult — but perhaps above all was a nonstop, months-long performance of bravura message discipline. Since the Democratic primary began in earnest earlier this year, Mamdani has harped in virtually every public appearance on what he has described as New York’s “affordability crisis,” promising to lower the city’s cost of living for working-class residents.
He hammered that message even as the election required him to play a shifting set of roles. During the primary, he set himself apart from a field overflowing with progressives by showcasing his differences with the Democratic Party. During the general election, he became the consummate Democrat, earning the votes of the party’s most loyal voters even as the former governor and one-time old-guard Democrat Andrew Cuomo ran an independent bid. Fittingly, Mamdani’s victory speech Tuesday night alluded to and remixed lines from socialists and liberal Democrats alike — including Cuomo’s father, New York’s former governor Mario Cuomo.
“A great New Yorker once said that while you campaign in poetry, you govern in prose,” Mamdani said, paraphrasing the elder Cuomo. “If that must be true, let the prose we write still rhyme, and let us build a shining city for all.”
So given all the notes he struck during the campaign, it is revealing to consider those Mamdani left unplayed. One in particular stands out: Throughout the long mayoral campaign, Mamdani rarely spoke about climate change — often doing so only when directly asked.
This might not seem meaningful on its face. Mamdani had a lot of issues he could focus on, after all. (He also spoke intermittently about, say, K-12 education, even though as mayor he will oversee the nation’s largest school district.)
But in light of his biography, Mamdani’s relative reticence on climate change stands out. During his early career in the state legislature, Mamdani defined himself in part through his climate activism, and by his view that New York should be “leading the country in our fight against the climate crisis,” as he said in a 2022 press release. He helmed some of the most aggressive recent activist efforts to shut down, block, and replace fossil fuel infrastructure in Gotham. They provide a window into where his mayoralty could go — and also illustrate the fraught politics of climate change in Year 1 of Trump 2.0.
From his first days in the New York State Assembly in 2021, Mamdani placed himself at the forefront of the debate over the future of fossil fuels in New York’s energy system. “When I ran for this office, it was on a platform of housing, justice, and energy for all,” he said in a statement soon after his election.
Many of his biggest policy proposals as a legislator focused on climate change. He backed the Build Public Renewables Act, a bill that empowers New York’s state power agency to develop wind and solar projects in order to meet the state’s climate goals. He resisted NRG Energy’s push to replace an aging natural gas peaker plant in Astoria, Queens, with a newer power plant that would still burn gas. And he opposed the expansion of natural gas pipelines into the state while cosponsoring the Clean Futures Act, which would, he said, ban all new natural gas power plants across New York.
Climate change was the issue, he said, at the very heart of his political identity. In July 2022, after the state assembly expired without a vote on the Build Public Renewables Act and amid a heat wave in New York, he called for a special session to pass the bill, deeming climate change a “human catastrophe.”
“There are a number of bills that I would love to pass tomorrow. I’m not calling for a special session for all of them,” he told Spectrum News. “The reason we have to call for this one is because climate change is not waiting.”
In its fight against the Queens power plant, his legislative office — working alongside the Stop NRG Coalition, an alliance of local residents, the Democratic Socialists of America, and traditional environmentalists such as Earthjustice and the Sierra Club — called 36,000 households and sent more than 7,800 postcards asking residents to reject the plant, Mamdani later said. Ultimately, locals filed more than 6,000 comments to oppose the proposed plant; when the New York Department of Environmental Conservation ultimately denied a key permit in October 2022, Mamdani claimed victory.
He was also clear about who had lost that fight: big corporations and fossil fuel-aligned capitalism. “This shows when we organize against corporations that put capital over the collective, we can win a world where we all live with dignity,” he said. “Stopping the Astoria power plant is an amazing victory towards a habitable planet and the clean future we all deserve.”
Many of Mamdani’s other climate efforts were ultimately successful. The Build Public Renewables Act passed in April 2023 as part of the state budget and was signed into law by Governor Kathy Hochul. The state has not passed the Clean Futures Act, although regulators have rejected other proposed fossil-fuel power plants across the state, citing its 2019 climate leadership law.
In a little-watched May 2021 video that gives a concentrated dose of Mamdani’s political vision at the time, he described himself not as a socialist, but as a “proud ecosocialist” who believed that electricity should be treated as a “public good.”
“Did you ever wonder why New York state only gets 5% of its energy from wind and solar?” he asked in the video. “It’s because of one word: capitalism.” The way to fight that capitalistic hold on energy production, he said, was with public power — government ownership and development of zero-carbon generation.
Even after those victories, Mamdani remained a proud champion of climate issues. As recently as a year ago, he suggested that activism and agitation around climate change was a key way that progressives could differentiate themselves from Trump in the eyes of the working class. At a rally in late November last year, shortly after a drought resulted in a rare brush fire that consumed 2 acres of the city’s beloved Prospect Park, he exhorted the New York Power Authority, or NYPA, to move faster to develop its pipeline of renewables projects — and framed credible climate action as essential to countering Trump’s rise.
“The climate crisis does not care about any of the reasons that are usually given so much weight in Albany. It doesn’t care if you want to blame the supply chain. It doesn’t care if a private company says it has reduced profitability. It cares only if you build out renewable infrastructure,” he said.
“If you want to know how to defeat the Donald Trump far-right movement, it’s by showing we actually have a workable alternative,” he continued. “Because if working class people can’t breathe the air, if they can’t afford to live in the city they call home because they can’t find a union job, and if they look around at their favorite parks being on fire, why would they trust us?”
“It is time to show them why,” he concluded. “It’s time for the Build Public Renewables Act.”
Mamdani has continued to push for NYPA to accelerate its renewables construction — he posted a video of the same rally to his Instagram feed in September, encouraging his followers to file public comments with New York state.
As recently as February 2025, he described New York City as facing an “existential moment of our climate crisis” at a candidate forum, and said that enforcing the city’s climate laws would require “taking on the real-estate industry.”
But in the months since, his earlier bold rhetoric — casting practical concerns as no object when it comes to climate action — has faded, and he has evinced more sympathy for landlords and homeowners who may bear decarbonization’s costs. He still describes climate change in existential terms, but has become far less likely to bring it up unbidden in his own speeches and media appearances.
As a major party mayoral candidate, too, Mamdani largely avoided framing climate action as a necessary antidote to Trumpism. When seeking to contrast himself with the president, he focused almost entirely on cost of living issues. In a Fox News appearance in October, Mamdani addressed Trump directly and said that he would work with him to address New Yorkers’ cost of living.
His campaign website’s only stated climate proposal is a “Green Schools” plan to renovate 500 public schools, turn 500 asphalt schoolyards into green spaces, and construct “resilience hubs” at 50 schools. Speaking with The Nation in April — in one of his few recent long-form interviews on climate policy — Mamdani set that plan within his broader campaign, saying “climate and quality of life are not two separate concerns. They are, in fact, one and the same.” Schools, he said, offer “an opportunity for comprehensive climate action.”
But his website has few other details about what climate actions he might like to pursue once he takes office as mayor. Indeed, the candidate who once blamed capitalism for New York’s failure to build renewables is now promising to establish a “Mom-and-Pop Czar” to cut fines on small businesses and speed up permitting. It also gives few clues about how Mamdani would handle decarbonization’s inevitable trade-offs. If achieving a faster renewables buildout led to higher energy prices for consumers and small businesses, what would he do?
Even in situations where his slogans could reasonably connect to some climate benefit, Mamdani did not complete the handshake. His website does not mention the pollution benefits of fast and free bus service, for instance, even though free transit in other campaigns has been described as a climate policy. His 25-minute victory speech, delivered to a jubilant crowd on Tuesday night, did not mention climate change at all.
Regardless of what he’s said, Mamdani will be required to take big actions on climate policy as mayor. The most significant will likely arise from an ordinance called Local Law 97, which requires New York City’s large buildings to reduce their greenhouse gas emissions by 2050. That law’s strict new set of pollution caps and penalties will start in 2029, and many landlords are set to pay big fines. During the second mayoral debate, Mamdani repeated that the “climate crisis is one of the most pressing issues facing this city,” and said he wants the law’s fines to be enforced. But he also added that “the city should make it easier for buildings to comply.”
Mamdani has also argued that the city and state should renew a set of tax breaks to make it cheaper for large residential buildings, like condos and co-ops, to meet the law’s targets, and has proposed creating a “one-stop shop” for Local Law 97 compliance in the city governance, according to his debate remarks and a memo about homeowner policy released by his campaign.
In replacing climate change with cost of living, Mamdani has moved closer to what appears to be an emerging consensus among his party. Recent autopsies of the 2024 election have argued that voters believed Democrats were too focused on issues like climate change and not enough on affordability or inflation. Mamdani’s relentless focus on near-term costs — and his embrace of clear, actionable, and frankly non-climate-related slogans — suggests that one young ecosocialist might now agree with them. His ultimate victory suggests that it wasn’t a bad gamble.
The next governor of the Garden State turned a potential liability into an advantage.
Mikie Sherrill was vulnerable. While New Jersey’s gubernatorial elections tend to favor the party not in control of the White House, no party had won three straight terms in the governor’s mansion at Drumthwacket since the Kennedy administration.
Yet the Democratic congresswoman and former Navy helicopter pilot defeated her Republican rival, former New Jersey State Assemblyman Jack Ciattarelli, on Tuesday night by a comfortable margin of 56% to 43% at press time.
To get there, Sherrill had to overcome not only historical precedent but a potentially devastating kitchen table issue: New Jersey has seen its already high electricity prices rise faster than almost anywhere else in the country, with retail rates going up as much as 20% this summer alone.
It could have proved politically lethal. Heatmap polling has shown that voters blame their state government and electric utility for rising rates more than anyone currently or formerly in power in Washington, D.C. And they are worried about electricity prices — according to CNN exit polling, the top issues among New Jersey voters were taxes and the economy, with about 60% saying that electricity costs were a “major problem where they live.”
Sherrill sought to turn the electricity cost issue from a burden to an advantage by making a clear and simple pledge: that she would declare a state of emergency and freeze utility bills. “On day one, I’m declaring a state of emergency on utility hikes. I’ll freeze those rate hikes to lower your family’s bills… New Jersey, I am not playing. I am not writing a strongly worded letter, I am not starting up a working group, I'm not doing a 10 year study. I am declaring a state of emergency,” Sherrill declared at a pre-election rally.
The results speak for themselves, but they are not entirely unexpected. Sherrill had consistently led in polling against Ciattarelli and even had a 10-point lead on who would handle energy costs better, according to a Fox News poll.
“Mikie Sherrill took the issue of soaring utility bills seriously and centered her campaign around a concise solution to this ongoing crisis,” Skanda Amarnath, the executive director of economics think tank Employ America, told me. “She deserves credit for not shying away from what could have easily been a liability of a campaign issue.”
Sherrill was able to use the electricity prices issue to create some space from her predecessor, incumbent governor Phil Murphy. Murphy was associated with a renewables forward strategy, including offshore wind, and had cast some doubt on the effectiveness and practicality of Sherrill’s pledge. “I’m not sure how you’d actually do that,” Murphy told reporters in August.
“Governor Murphy has taken a lot of blame for increased energy prices. He kind of went all in on clean energy. I think she’s trying to create distance between herself and an incumbent from her party,” Dan Crawford, senior vice president at Echo Communications Advisors, a public relations firm that specializes in climate and clean energy, told me.
Sherrill also embraced nuclear energy on the trail, one of the few non-politically-polarizing energy generation sources left in the United States, saying she would “immediately develop a plan for a new nuclear power site in Salem County.”
Ciattarelli stuck to standard Republican moves on energy, saying he would ban offshore wind and take New Jersey out of the Regional Greenhouse Gas Initiative, the Northeastern cap-and-trade system.
“The price freeze was a very smart move because it was very old in a way. It's very Trumpy,” Crawford said. “I'm going to use an executive order to freeze prices. I'm going to fight for you. I'm going to take the fight to PJM. She’s not really worrying as much about the details, but she’s calling attention to the issue. I think that did kind of make energy prices a bigger issue in the campaign and put Ciattarelli on the defensive a little bit.”
Now Sherrill will have to deal with the politics and practicalities of actually implementing a price freeze, navigating potential legal challenges, and maintaining the necessary investment levels in the state’s grid in order to meet its decarbonization goals.
“For the first time in a long time, utility bills became a top issue in a gubernatorial election. In New Jersey, both candidates leaned heavily on utility affordability messaging, feeling pressure from voters to demonstrate leadership on this issue,” Charles Hua, the executive director of Powerlines, told me. “Now, it is imperative for Governor Sherrill to deliver on her promise to make utilities affordable — voters will be paying attention.”
Environmental groups hailed Sherrill’s win as a victory for renewables against the regulatory assault launched on them by President Trump and as a sign that advocates for renewables could effectively leverage the electricity price issue to their advantage.
“Make no mistake, out of control energy costs were a top tier issue in this year’s election, and in Sherrill, New Jerseyans have elected a governor who knows that renewable energy is cheaper, cleaner, and faster to deploy than dirty, old alternatives, and who has a strong mandate to lead the Garden State forward,” EDF Action president David Klieve said in a statement.
And the electricity price issue will likely flare up in statewide and national races in 2026.
“Electricity price spikes are going on all over the country,” Justin Balik, a vice president at Evergreen Action, told me. “Folks should be taking a close look at how Mikie messaged around these issues.”