You’re out of free articles.
Log in
To continue reading, log in to your account.
Create a Free Account
To unlock more free articles, please create a free account.
Sign In or Create an Account.
By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy
Welcome to Heatmap
Thank you for registering with Heatmap. Climate change is one of the greatest challenges of our lives, a force reshaping our economy, our politics, and our culture. We hope to be your trusted, friendly, and insightful guide to that transformation. Please enjoy your free articles. You can check your profile here .
subscribe to get Unlimited access
Offer for a Heatmap News Unlimited Access subscription; please note that your subscription will renew automatically unless you cancel prior to renewal. Cancellation takes effect at the end of your current billing period. We will let you know in advance of any price changes. Taxes may apply. Offer terms are subject to change.
Subscribe to get unlimited Access
Hey, you are out of free articles but you are only a few clicks away from full access. Subscribe below and take advantage of our introductory offer.
subscribe to get Unlimited access
Offer for a Heatmap News Unlimited Access subscription; please note that your subscription will renew automatically unless you cancel prior to renewal. Cancellation takes effect at the end of your current billing period. We will let you know in advance of any price changes. Taxes may apply. Offer terms are subject to change.
Create Your Account
Please Enter Your Password
Forgot your password?
Please enter the email address you use for your account so we can send you a link to reset your password:
That’s according to new research published today analyzing flows of minerals and metals vs. fossil fuels.
Among fossil fuel companies and clean energy developers, almost no one has been spared from the effects of Trump’s sweeping tariffs. But the good news is that in general, the transition to clean energy could create a world that is less exposed to energy price shocks and other energy-related trade risks than the world we have today.
That’s according to a timely study published in Nature Climate Change on Wednesday. The authors compared countries’ trade risks under a fossil fuel-based energy economy to a net-zero emissions economy, focusing on the electricity and transportation sectors. The question was whether relying on oil, gas, and coal for energy left countries more or less exposed than relying on the minerals and metals that go into clean energy technologies, including lithium, cobalt, nickel, and uranium.
First the researchers identified which countries have known reserves of which resources as well as those countries’ established trading partners. Then they evaluated more than a thousand pathways for how the world could achieve net-zero emissions, each with different amounts or configurations of wind, solar, batteries, nuclear, and electric vehicles, and measured how exposed to trade risks each country would be under each scenario.
Ultimately, they found that most countries’ overall trade risks decreased under net-zero emissions scenarios relative to today. “We have such a concentration of fossil resources in a few countries,” Steven Davis, a professor of Earth system science at Stanford and the lead author of the study, told me. Transition minerals, by contrast, are less geographically concentrated, so “you have this ability to hedge a little bit across the system.”
The authors’ metric for trade risk is a combination of how dependent a given country is on imports and how many trading partners it has for a given resource, i.e. how diverse its sourcing is. “If you have a large domestic supply of a resource, or you have a large trade network, and you can get that resource from lots of different trading partners, you're in a relatively better spot,” Davis said.
Of course, this is a weird time to conclude that clean energy is better equipped to withstand trade shocks. As my colleagues at Heatmap have reported, Trump’s tariffs are hurting the economics of batteries, renewables, and minerals production, whether domestic or not. The paper considers risks from “random and isolated trade shocks,” Davis told me, like losing access to Bolivian lithium due to military conflict or a natural disaster. Trump’s tariffs, by contrast, are impacting everything, everywhere, all at once.
Davis embarked on the study almost two years ago after working as a lead author of the mitigation section of the Fifth National Climate Assessment, a report delivered to Congress every four years. A lot of the chapter focused on the economics of switching to solar and wind and trying to electrify as many end uses of energy as possible, but it also touched on considerations such as environmental justice, water, land, and trade. “There's this concern of having access to some of these more exotic materials, and whether that could be a vulnerability,” he told me. “So we said, okay, but we also know we're going to be trading a lot less fossil fuels, and that is probably going to be a huge benefit. So let's try to figure out what the net effect is.”
The study found that some more affluent countries, including the United States, could see their energy security decline in net-zero scenarios unless their trade networks expand. The U.S. owns 23% of the fossil reserves used for electricity generation, but only 4% of the critical materials needed for solar panels and wind turbines.
One conclusion for Davis was that the U.S. should be much more strategic about its trade partnerships with countries in South America and Sub-Saharan Africa. Companies are already starting to invest in developing mineral resources in those regions, but policymakers should make a concerted effort to develop those trade relationships, as well. The study also discusses how governments can reduce trade risks by investing in recycling infrastructure and in research to reduce the material intensity of clean energy technologies.
Davis also acknowledged that focusing on the raw materials alone oversimplifies the security question. It also matters where the minerals are processed, and today, a lot of that processing happens in China, even for minerals that don’t originate there. That means it will also be important to build up processing capacity elsewhere.
One caveat to the paper is that comparing the trade risks of fossil fuels and clean energy is sort of apples and oranges. A fossil fuel-based energy system requires the raw resource — fuel — to operate. But a clean energy system mostly requires the raw materials in the manufacturing and construction phase. Once you have solar panels and wind turbines, you don’t need continuous commodity inputs to get energy out of them. Ultimately, Davis said, the study’s conclusions about the comparative trade risks are probably conservative.
“Interrupting the flow of some of these transition materials could slow our progress in getting to the net zero future, but it would have much less of an impact on the actual cost of energy to Americans,” he said. “If we can successfully get a lot of these things built, then I think that's going to be a very secure situation.”
Log in
To continue reading, log in to your account.
Create a Free Account
To unlock more free articles, please create a free account.
A loophole created by the House Ways and Means text disappeared in the final bill.
Early this morning, the House of Representatives launched a full-frontal assault on the residential solar business model. The new language in the budget reconciliation bill to extend the Tax Cuts and Jobs Act passed Thursday included even tighter restrictions on the tech-neutral investment tax credits claimed by businesses like Sunrun when they lease solar systems to residential buyers.
While the earlier language from the Ways and Means committee eliminated the 25D tax credit for those who purchased home solar systems after the end of this year (it was originally supposed to run through 2034), the new language says that no credit “shall be allowed under this section for any investment during the taxable year” (emphasis mine) if the entity claiming the tax credit “rents or leases such property to a third party during such taxable year” and “the lessee would qualify for a credit under section 25D with respect to such property if the lessee owned such property.”
This is how you kill a business model in legislative text.
“Expect shares of solar companies to take a significant step back,” Jefferies analyst Julien Dumoulin-Smith wrote in a note to clients Thursday morning, calling the exclusion “scathing.” Investors are “losing the now false sense of security that we had 'seen the worst' of it with the initial House draft.”
Joseph Osha, an analyst for Guggenheim, agrees. “Considering the fact that ~70% of the residential solar industry is now supported by third-party (e.g. lease or PPA) financing arrangements, the new language is disastrous for the residential solar industry,” he wrote in a note to clients. “We believe the near-term implications are very negative for Sunrun, Enphase, and SolarEdge.”
Shares of Sunrun are down 37.5% in mid-day trading, wiping off almost $1 billion worth of value for its shareholders. The company did not respond to a request for comment. Shares of fellow residential solar inverter and systems Enphase are down 20%, while residential solar technology company SolarEdge’s shares are down 24.5%.
“Families will lose the freedom to control their energy costs,” Abigail Ross Hopper, chief executive of the Solar Energy Industries Association, said in a statement, in reference to the last-minute alteration to the investment tax credit.
When the House Ways and Means Committee released the initial language getting rid of 25D by the end of this year but keeping a limited version of the investment tax credit, analysts noted that Sunrun was an unexpected winner from the bill. It typically markets its solar products as leases or power purchase agreements, not outright sales of the system.
The reversal, Dumoulin-Smith wrote, “comes as a surprise especially considering how favorable the initial markup was” to the Sunrun business model.
“Our core solar service offerings are provided through our lease and power purchase agreements,” the company said in its 2024 annual report. “While customers have the option to purchase a solar energy system outright from us, most of our customers choose to buy solar as a service from us through our Customer Agreements without the significant upfront investment of purchasing a solar energy system.” .
The new bill, Dumoulin-Smith writes is “‘leveling the playing field’ by targeting all future residential solar originations, whether leased or owned.” The bill is “negative to Sunrun with intentional targeting of the sector.
Last year, Sunrun generated over $700 million from transferring investment tax credits from its solar and storage projects. The company said that it had $117 million of “incentives revenue” in 2024, which includes the tax credits, out of around $1.4 billion in total revenue.
But the tax credits play a far larger role in the business than just how they’re recognized on the company’s earnings statements. The company raises investment funds to help finance the projects, where investors get payments from customers as well as monetized tax credits. Fund investors can “can receive attractive after-tax returns from our investment funds due to their ability to utilize Commercial ITCs,” the company said in its report. Conversely, the financing “enables us to offer attractive pricing to our customers for the energy generated by the solar energy system on their homes.”
Morgan Stanley analyst Andrew Perocco wrote to clients that “this is a noteworthy change for the residential solar industry, and Sunrun in particular, which dominates the residential solar [third-party owned] market and has recognized ITC credits under 48E.”
Current conditions: A late-season nor’easter could bring minor flooding to the Boston area• It’s clear and sunny today in Erbil, Iraq, where the country’s first entirely off-grid, solar-powered village is now operating • Thursday will finally bring a break from severe storms in the U.S., which has seen 280 tornadoes more than the historical average this year.
1. House GOP passes reconciliation bill after late-night tweaks to clean energy tax credits
The House passed the sweeping “big, beautiful” tax bill early Thursday morning in a 215-214 vote, mostly along party lines. Republican Representatives Thomas Massie of Kentucky and Warren Davidson of Ohio voted no, while House Freedom Caucus Chair Andy Harris of Maryland voted “present;” two additional Republicans didn’t vote.
The bill will effectively kill the Inflation Reduction Act, as my colleague Emily Pontecorvo has written — although the Wednesday night manager’s amendment included some tweaks to how, exactly, as well as a few concessions to moderates. Updates include:
The bill now heads to the Senate — where more negotiations will almost certainly follow — with Republicans aiming to have it on President Trump’s desk by July 4.
2. FEMA cancels 4-year strategic plan, axing focus on ‘climate resilience’
The combative new acting administrator of the Federal Emergency Management Agency, David Richardson, rescinded the organization’s four-year strategic plan on Wednesday, per Wired. Though the document, which was set to expire at the end of 2026, does not address specific procedures for given disasters, it does lay out goals and objectives for the agency, including “lead whole of community in climate resilience” and “install equality as a foundation of emergency management.” In axing the strategic plan, Richardson told staff that the document “contains goals and objectives that bear no connection to FEMA accomplishing its mission.”
A FEMA employee who spoke with Wired stressed that while rescinding the plan does not have immediate operational impacts, it can still have “big downstream effects.” Another characterized the move by the administration as symbolic: “There are very real changes that have been made that touch on [equity and climate change] that are more important than the document itself.”
3. Energy Department redirects Puerto Rican rooftop solar investment to upkeep of fossil fuel plants
The U.S. federal government is redirecting a $365 million investment in rooftop solar power in Puerto Rico to instead maintain the island’s fossil fuel-powered grid, the Department of Energy announced Wednesday. The award, which dates to the Biden administration, was intended to provide stable power to Puerto Ricans, who have become accustomed to blackouts due to damaged and outdated infrastructure. The Puerto Rico Electric Power Authority declared bankruptcy in 2017, and a barrage of major hurricanes — most notably 2017’s Hurricane Maria — have destabilized the island’s grid, Reuters reports.
In Energy Secretary Chris Wright’s statement, he said the funds will go toward “dispatching baseload generation units, supporting vegetation control to protect transmission lines, and upgrading aging infrastructure.” But Javier Rúa Jovet, a public policy director for Puerto Rico’s Solar and Energy Storage Association, added to The Associated Press that “There is nothing faster and better than solar batteries.”
4. EDF, Shell, and others to collaborate on hydrogen emission tracker
The Environmental Defense Fund announced Wednesday that it is launching an international research initiative to track hydrogen emissions from North American and European facilities, in partnership with Shell, TotalEnergies, Air Products, and Air Liquide, as well as other academic and technology partners. Hydrogen is an indirect greenhouse gas that, through chemical reactions, can affect the lifetime and abundances of planet-warming gases like methane and ozone. Despite being a “leak-prone gas,” hydrogen emissions have been poorly studied.
“As hydrogen becomes an increasingly important part of the energy system, developing a robust, data-driven understanding of its emissions is essential to supporting informed decisions and guiding future investments in the sector,” Steven Hamburg, the chief scientist and senior vice president of EDF, said in a statement. Notably, EDF took a similar approach to tracking methane over a decade ago and ultimately exposed that emissions were “a far greater threat” than official government estimates suggested.
5. The best-selling SUV in America will now be available only as a hybrid
Toyota
The bestselling SUV in America, the Toyota RAV4, will be available only as a hybrid beginning with the 2026 model, Car and Driver reports. The car will be available both as a conventional hybrid and as a plug-in that works with CCS-compatible DC fast chargers, meaning “owners can quickly fill up its battery during long road trips” to minimize their fossil fuel mileage, The Verge adds. The RAV4 will also beat the Prius for electric range, hitting up to 50 miles before its gas engine kicks in.
Toyota’s move might not come as a complete surprise given that the automaker already introduced a hybrid-only lineup for its Camry. But given the popularity of the RAV4, Car and Driver notes that “if you ever wondered whether or not hybrids have entered the mainstream yet, perhaps this could be a tipping point.”
Nathan Hurner/USFWS
The Fish Lake Valley tui chub, a small minnow threatened by farming and mining activity, could become the first species to be listed as endangered under the second Trump administration.
The House passed its version of the budget bill early Thursday morning, with even deeper cuts to clean energy added overnight.
Trump’s tax bill passed the House early Thursday morning, after a marathon session in the Rules Committee that began early Wednesday morning and stretched late into the night. The final floor vote came down to the slimmest of margins, 215 yeas to 214 nays, with House Freedom Caucus Chair Andy Harris voting “present.”
The clean energy tax credits, already on life support, barely made it out alive.
The text that now heads to the Senate retains many of the provisions that came out of the Ways and Means Committee last week, but would terminate some of the tax credits even more rapidly to appease Republican hardliners.
It still eliminates the electric vehicle tax credits after this year, except for vehicles produced by automakers that have sold fewer than 200,000 tax credit-qualified cars, which will be eligible for one additional year. It still terminates tax credits for residential energy efficiency, rooftop solar, and new, energy-efficient homes. And it still ends the clean hydrogen tax credit at the end of this year.
But for the clean electricity subsidies, the revised text nixes the previously proposed three-year phase-down schedule and bluntly cuts off any project that doesn’t break ground within 60 days of the bill’s passage — basically the same deal handed to the hydrogen industry.
The only concession to the many objections to the bill from the clean energy industry appears to be some carve outs for nuclear plants.
Here’s a rundown of everything that changed.
The revised text demands that clean power projects start construction within 60 days of the bill’s final passage in order to qualify for the production and investment tax credits, 45Y and 48E. Projects that are able to hit that deadline would also have to meet a second one — they would have to start operating before 2029.
But there’s an exception for advanced nuclear facilities, which would only have to start construction by 2029 to be eligible for the credits and would have no deadline to begin sending power to the grid.
The amended text also speeds up material sourcing requirements that prohibit clean power projects from using anything made in China. Under the earlier iteration, power companies would have had a full year to reorganize their supply chains — a timeline that industry experts already said was unworkable. The revised bill imposes the restriction starting January 1 of next year.
In summary, if you are developing a wind farm and want to qualify for tax credits, you now face an almost impossibly short eligibility timeline. You would have to start construction within two months of the reconciliation package passing, eliminate Chinese goods from your supply chain before the end of the year, and then get your project hooked up to the grid and operating by the end of 2028.
When that 60-day clock starts will depend on how long it takes the Senate to pass its version of the reconciliation bill and both houses to approve the final text, which could take weeks or months. Regardless, these new time restrictions would likely “TANK real projects in active development right now, killing jobs and costing investment,” as industry group Advanced Energy United’s managing director Harry Godfrey posted on social media Wednesday night. Godfrey went on to name six projects in Republican districts, including solar farms, solar on schools, and a long-duration storage installation, that would be affected.
To the few clean energy developers that can hit all of these deadlines, House Republicans have offered a small reward. The revised bill appears to retain transferability, the ability for developers to sell their clean energy tax credits to other companies and thereby access more capital more quickly and easily than they otherwise would. There is some confusion among energy experts, however, about exactly how this provision would apply, with Politico Pro reporting Thursday morning that only nuclear would be able to use it. Regardless, the 60-day deadline to start construction makes this mostly moot.
A new section of text takes aim at companies like Sunrun that lease solar installations to homeowners and businesses. Under current law, Sunrun typically claims the commercial investment tax credit (48E) for solar installations on customers' roofs. But the change would prohibit any company that leases solar or wind installations to a third party from claiming the tax credits for those projects.
Under the Way and Means version of the budget bill, the tax credit for electricity produced by existing nuclear plants would have phased down over three years before terminating in 2032. The revised bill nixes the phase-out, keeping the full amount of the credit in place until 2032, which is just one year earlier than the phase-out timeline in the Inflation Reduction Act.
The revised bill also allows nuclear plant owners to take advantage of transferability for as long as the credit is in effect — a provision that nuclear industry advocates told me was essential to keeping existing plants online.
The text does not make any amendments to the Ways and Means bill’s changes to the carbon capture (45Q), clean fuels (45Z), and advanced manufacturing (45X) projects. These projects would still not be able to use transferability past 2027.
The clean fuels credit would still be extended for four years, through the end of 2031, and come with looser carbon accounting rules. The clean manufacturing credit would still be cut short by a year, with wind manufacturers losing their eligibility even earlier, in 2028.
These provisions are not yet law, and there are a number of Republican Senators who have subtly, though publicly disagreed with the approach the House has taken to paring back the tax credits. Regarding the short timeline the Ways and Means Committee had proposed for claiming the tax credits, Kevin Cramer of North Dakota told Politico, “we’ll have to change that.” Shelley Moore Capito of West Virginia said she expected the “blanket” repeal of the tax credits to change, noting “there has been job creation around these tax credits.” And four Republicans led by Alaska’s Lisa Murkowski also sent a letter to party leadership back in April arguing to maintain the tax credits.
The House appeared to have its clean energy holdouts too, however. But as my colleague Matthew Zeitlin wrote on Wednesday, “at no point have these members ever seriously threatened to vote against the bill” in support of the tax credits, and at the end of the day their concerns were mostly ignored.
The Senate is about to take a week-long recess, and won’t be back in session until June 2. How long until the one big, beautiful bill becomes law, nobody knows. But we’ll soon see how hard the energy transition’s defenders are actually willing to fight.