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Just don’t confuse them with SMRs.
When politicians tell the CEO of Radiant that they love small modular reactors, he groans inwardly and just keeps smiling.
Doug Bernauer’s Radiant is not trying to make SMRs. His company — a VC-backed startup currently in the pre-application phase with the Nuclear Regulatory Commission — is designing a portable nuclear microreactor, which is intended to replace diesel generators. The politicians don’t always know the difference, Bernauer told me.
The SMR-microreactor confusion is common outside the world of nuclear. While they are both versions of advanced nuclear technologies not yet built in the United States (all of our nuclear power comes from big, old-fashioned plants), SMRs and microreactors have different designs, power outputs, costs, financing models, and potential use cases.
Unlike SMRs, microreactors are too small to ever become key energy players within a full-sized grid. But they could replace fossil fuels in some of the hardest to decarbonize sectors and locations in the world: mines, factories, towns in remote locations (especially Alaska and northern Canada), military bases, and (ironically) oil fields. For those customers, they could also make power supply and prices more consistent, secure, and dependable than fossil fuels, whose fluctuating prices batter industrial sectors and the residents of remote towns without discrimination.
Perhaps even more importantly, microreactors’ small size and comparatively low price could make them a gateway drug for new nuclear technologies in the U.S., helping companies and regulators build the know-how they need to lower the risk and cost for larger projects.
Heatmap Illustration/Radiant, IAEA, Getty Images
The big problem with this idea? No functional commercial nuclear microreactor actually exists. Industry experts cannot say with confidence that they know what the technological hurdles are going to be, how to solve them, or what it’s going to cost to address them.
“My crystal ball is broken,” John Parsons, an economist researching risk in energy at the Massachusetts Institute of Technology, said when I asked him whether he believed microreactors would make it through the technical gauntlet. “I’m hopeful. But I’m also very open-minded. I don’t know what’s going to happen. And I really believe we need a lot of shots on goal, and not all shots are going to go through,” he said.
Recent advances in both technology and regulation indicate that in the next few years, we should have some answers.
Private companies are expecting to conduct their first tests in about two years, and they are in conversations with potential customers. Radiant is hoping to test at the Idaho National Laboratory in 2026; Westinghouse and Ultra Safe Nuclear Corporation have contracts to test microreactors there as well. BWX Technologies is currently procuring the parts for a demonstration reactor through the Department of Defense’s prototype program — called Project Pele — and plans to test in about two years; X-energy signed an expanded contract in 2023 to build a prototype for Project Pele as well. Eielson Air Force Base in Alaska is commissioning a pilot microreactor. Schools including Pennsylvania State University and the University of Illinois have announced their interest as potential customers. Mining companies and other industry players in Alaska regularly express interest in embracing this technology.
The government is also quietly smoothing the way, removing barriers to make those tests possible. On March 4, the Nuclear Regulatory Commission released a new draft of licensing rules that will shape the future for these microreactors, and early March’s emergency spending bill included more than $2.5 billion repurposed for investment in a domestic supply chain of the type of nuclear fuel most advanced reactors will require.
“If we are truly committed as a nation to sticking to our climate goals, then we will absolutely get to a place where there are a bunch of microreactors replacing otherwise difficult to decarbonize sectors and applications,” said Kathryn Huff, the head of the office of nuclear energy at the Department of Energy.
Eric Gimon, a senior fellow at the nonprofit Energy Innovation, was a microreactor skeptic until about a month ago. His own recent research has made him far more optimistic that these microreactors might actually be technologically feasible, he told me when I reached out for an honest critique. “If they can make (the microreactors) work, it’s attractive,” he said. “There are a lot of industrial players that are going to want to buy them.”
“If your goal is to produce power at 4 cents per kilowatt hour, why would you buy any power that’s way more expensive than what you need? You do it because if that adds diversity to the portfolio and less variance, then you can get an overall portfolio that is lower cost or a lower risk for the same cost,” he told me.
Everyone I spoke to in the industry began our conversation with the same analogy: In the world of nuclear, full-size power plants are to airports what microreactors are to airplanes. Just as it's easier to build and regulate an airplane than an entire airport, in theory the microreactors should be built in a factory, regulated and licensed in the factory, and then rented out to or sold to the end user. An airport requires approvals specific to the construction site, a huge team of people employed for a long time to construct it and then another team to maintain it, and complicated financing based on the idea that the airport could be used for 50 or more years; a full-scale nuclear plant is the same. An airplane can basically be ordered online; a microreactor should be the same.
“They are sized to be similar to that kind of scope, where you could really consolidate a lot of the chemical and manufacturing oversight to a single location rather than moving thousands of people to a construction site,” Huff told me.
Microreactors should produce relatively small amounts of power (a maximum of 10-20 megawatts) and lots of heat with a tiny amount of nuclear fuel. They are usually portable, and if they aren’t portable they require a limited amount of construction or installation. Because it should not be possible to handle the fuel once it leaves the factory (most of the proposed reactor designs set the fuel deep into a dense, inaccessible matrix), these reactors wouldn’t require the same safety and security measures on site as a nuclear power plant. They’re easily operated or managed by people without nuclear expertise, and their safety design — called passive safety — should make it technically impossible for a reactor to meltdown.
“The excess reactivity is so small that you actually can’t get the reactor hot enough that you could start damaging the fuel. That’s something unique about the microreactor that would not necessarily be true for other types of nuclear,” Jeff Waksman, the program manager for the Department of Defense’s Strategic Capabilities Office, told me.
Microreactors should also cost on the order of tens of millions of dollars, not hundreds. That’s low enough that a company, university, town, or other similarly-sized entity could buy one or more of them. Because they’re cheaper than traditional nuclear, they don’t require lenders to take big risks on money committed over a very long period of time. If a mining company wanted to replace a diesel generator with one of these, they should be able to finance it in exactly the same way (a loan from the bank, for example). This makes their financial logic quite different from SMRs, which can suffer from some of the same problems as full-size nuclear power plants (see: NuScale’s recent setbacks).
“All of the things that contribute to a faster innovation cycle are true for microreactors compared to larger reactors. So you can just — build one,” said Rachel Slaybaugh, a partner at DCVC and a board member at Radiant, Fervo Energy, and Fourth Power.
Because microreactors max out at around 20 megawatts of energy, the economies of scale that eventually bring down energy prices for full-scale nuclear power can’t be replicated. While Jigar Shah, the director of the loan programs office at the DOE, speculated in a recent interview that costs might eventually go just below 10 cents per kilowatt hour, Parsons is skeptical that anyone could provide a practical cost estimate. It’s absolutely going to cost more than either large reactors or SMRs, Parsons said.
But cost comparisons to other types of nuclear technology aren’t practical, according to Slaybaugh. “You are going to be able to command a cost parity with diesel generators. It’s easy to get to a point where they make financial sense,” she said. “You can see why someone would pick one: This is not making noise, it’s not making local air pollution, you don’t have to deal with the diesel logistics complexity. You sell it at price parity, and maybe the first few customers pay a premium because they are excited about it.”
That premium price for the initial technology is the largest hurdle raised by every single person I spoke with, from the DOE to analysts and researchers to the different microreactor companies.
But there is one customer already inclined to pay a substantial premium: the Department of Defense. The U.S. military has greater resiliency and security needs than other consumers when it comes to its power supply, making the cost of microreactors more palatable. (And it doesn’t hurt that the taxpayer already foots the bill for enormous defense contracts, including for aircraft carriers and submarines powered by nuclear reactors). It’s common for technological innovations (think the internet, GPS, advanced prosthetics) to begin with the military and then expand outward to the consumer. Project Pele and the requests for proposals at Eielson Air Force Base both indicate that the pathway might be one for microreactors, according to Parsons.
For the president of BWXT Advanced Technologies, the Department of Defense’s decision to commission his company’s microreactor for Project Pele removed his last doubts that these microreactors would eventually be built. “The DOD being the first mover has extreme advantage for the country, and for eventually the commercial industry,” Joseph Miller told me. “The first mover was the barrier, and now it’s just 1,000 things that we’re working on all day every day to make it real, and there’s no gotcha out there that I see. That wasn’t the case when we were doing the design work, but now we’re making procurements to be able to assemble and deliver the reactor.”
Regardless of whether Miller’s optimism is well-founded, the experience gained in trying to make them happen is invaluable for a nuclear industry that’s been stuck in the mud for far too long.
“I've been talking with the federal government about the fact that there’s broader value in terms of getting wins on the board for the nuclear sector and getting the industry more experienced with building new things in a way that isn't quite so complicated,” Slaybaugh said. “Let’s have them build a thing that’s small and kind of cheap, and then they can go build a bigger thing that’s a little more expensive and a little more complicated. Let’s get some real reps in with microreactors.”
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The EV-maker is now a culture war totem, plus some AI.
During Alan Greenspan’s decade-plus run leading the Federal Reserve, investors and the financial media were convinced that there was a “Greenspan put” underlying the stock market. The basic idea was that if the markets fell too much or too sharply, the Fed would intervene and put a floor on prices analogous to a “put” option on a stock, which allows an investor to sell a stock at a specific price, even if it’s currently selling for less. The existence of this put — which was, to be clear, never a stated policy — was thought to push stock prices up, as it gave investors more confidence that their assets could only fall so far.
While current Fed Chair Jerome Powell would be loath to comment on a specific volatile security, we may be seeing the emergence of a kind of sociopolitical put for Tesla, one coming from the White House and conservative media instead of the Federal Reserve.
The company’s high-flying stock shed over $100 billion of value on Monday, falling around 15% and leaving the price down around 50% from its previous all-time high. While the market as a whole also swooned, especially high-value technology companies like Nvidia and Meta, Tesla was the worst hit. Analysts attributed the particularly steep fall to concerns that CEO Elon Musk was spending too much time in Washington, and that the politicization of the brand had made it toxic to buyers in Europe and among liberals in the United States.
Then the cavalry came in. Sean Hannity told his Fox News audience that he had bought a Model S, while President Donald Trump posted on Truth Social that “I’m going to buy a brand new Tesla tomorrow morning as a show of confidence and support for Elon Musk, a truly great American.” By this afternoon, Trump had turned the White House lawn into a sales floor for Musk’s electric vehicles. Tesla shares closed the day up almost 4%, while the market overall closed down after Trump and his advisors’ furious whiplash policy pronouncements on tariffs.
Whether the Tesla put succeeds remains to be seen. The stock is still well, well below its all-time highs, but it may confirm a new way to understand Tesla — not as a company that sells electric vehicles to people concerned about climate change, but rather as a conservative culture war totem that has also made sizable investments in artificial intelligence and robotics.
When Musk bought Twitter and devoted more of his time, energy, money, and public pronouncements to right wing politics, some observers thought that maybe he could lift the dreadful image of electric vehicles among Trump voters. But when Pew did a survey on public attitudes towards electric vehicles back in 2023, it found that “Democrats and Democratic-leaning independents, younger adults, and people living in urban areas are among the most likely to say they would consider purchasing an EV” — hardly a broad swathe of Trump’s America. More than two-thirds of Republicans surveyed said they weren’t interested in buying an electric car, compared to 30% of Democrats.
On the campaign trail, Trump regularly lambasted EVs, although by the end of the campaign, as Musk’s support became more voluminous, he’s lightened up a bit. In any case, the Biden administration’s pro-electric-vehicle policies were an early target for the Trump administration, and the consumer subsidies for EVs passed under the 2022 Inflation Reduction Act are widely considered to be one of the softest targets for repeal.
But newer data shows that the tide may be turning, not so much for electric vehicles, but likely for Tesla itself.
The Wall Street Journalreported survey data last week showing that only 13% of Democrats would consider buying a Tesla, down from 23% from August of 2023, while 26% of Republicans would consider buying a Tesla, up from 15%. Vehicle registration data cited by the Journal suggested a shift in new Tesla purchases from liberal urban areas such as New York, San Francisco, and Los Angeles, towards more conservative-friendly metropolises like Las Vegas, Salt Lake City, and Miami.
At the same time, many Tesla investors appear to be mostly seeing through the gyrations in the famously volatile stock and relatively unconcerned about month-to-month or quarter-to-quarter sales data. After all, even after the epic fall in Tesla’s stock price, the company is still worth over $700 billion, more than Toyota, General Motors, and Ford combined, each of which sells several times more cars per year than Tesla.
Many investors simply do not view Tesla as a luxury or mass market automaker, instead seeing it as an artificial intelligence and robotics company. When I speak to individual Tesla shareholders, they’re always telling me how great Full Self-Driving is, not how many cars they expect the company to sell in August. In many cases, Musk has made Tesla stockholders a lot of money, so they’re willing to cut him tremendous slack and generally believe that he has the future figured out.
Longtime Tesla investor Ron Baron, who bought hundreds of millions of dollars worth of shares from 2014 to 2016, told CNBC Tuesday morning, that Musk “believes that digitization [and] autonomy is going to be driving the future. And he thinks we’re … on the verge of having an era of incredible abundance.”Baron also committed that he hasn’t, won’t, and will never sell. “I’m the last in, I’ll be the last out. So I won’t sell a single share personally until I sell all the shares for clients, and that’s what I’ve done.”
Wedbush Securities’ Dan Ives, one of the biggest Tesla bulls on the street, has told clients that he expects Tesla’s valuation to exceed $2 trillion, and that its self-driving and robotics business “will represent 90% of the valuation.”
Another longtime Tesla bull, Morgan Stanley’s Adam Jonas, told clients in a note Monday that Tesla remained a “Top Pick,” and that his price target was still $430, compared to the stock’s $230.58 close price on the day. His bull case, he said, was $800, which would give the company a valuation over $2.5 trillion.
When the stock lags, Jonas wrote, investors see Tesla as a car company. “In December with the stock testing $500/share, the prevailing sentiment was that the company is an AI ‘winner’ with untapped exposure to embodied AI expressions such as humanoid robotics,” Jonas wrote. “Today with the stock down 50% our investor conversations are focused on management distraction, brand degradation and lost auto sales.”
In a note to clients Tuesday, Ives beseeched Musk to “step up as CEO,” and lamented that there has been “little to no sign of Musk at any Tesla factory or manufacturing facility the last two months.” But his bullishness for Tesla was undaunted. He argued that the scheduled launch of unsupervised Full Self-Driving in June “kicks off the autonomous era at Tesla that we value at $1 trillion alone on a sum-of-the-parts valuation.”
“Autonomous will be the biggest transformation to the auto industry in modern day history,” Ives wrote, “and in our view Tesla will own the autonomous market in the U.S. and globally.”
The most effective put of all may not be anything Trump says or does, but rather investors’ optimism about the future — as long as it’s Elon Musk’s future.
The uncertainty created by Trump’s erratic policymaking could not have come at a worse time for the industry.
This is the second story in a Heatmap series on the “green freeze” under Trump.
Climate tech investment rode to record highs during the Biden administration, supercharged by a surge in ESG investing and net-zero commitments, the passage of the Infrastructure Investment and Jobs Act and Inflation Reduction Act, and at least initially, low interest rates. Though the market had already dropped somewhat from its recent peak, climate tech investors told me that the Trump administration is now shepherding in a detrimental overcorrection. The president’s fossil fuel-friendly rhetoric, dubiously legal IIJA and IRA funding freezes, and aggressive tariffs, have left climate tech startups in the worst possible place: a state of deep uncertainty.
“Uncertainty is the enemy of economic progress,” Andrew Beebe, managing director at Obvious Ventures, told me.
The lack of clarity is understandably causing investors to throw on the brakes. “We’ve talked internally about, let’s be a little bit more cautious, let’s be a little more judicious with our dollars right now,” Gabriel Kra, co-founder at the climate tech firm Prelude Ventures, told me. “We’re not out in the market, but I would think this would be a really tough time to try and go out and raise a new fund.”
This reluctance comes at a particularly bad time for climate tech startups, many of which are now reaching a point where they are ready to scale up and build first-of-a-kind infrastructure projects and factories. That takes serious capital, the kind that wasn’t as necessary during Trump’s first term, or even much of Biden’s, when many of these companies were in a more nascent research and development or proof-of-concept stage.
I also heard from investors that the pace of Trump’s actions and the extent of the economic upheaval across every sector feels unique this time around. “We’re entering a pretty different economic construct,” Beebe told me, citing the swirling unknowns around how Trump’s policies will impact economic indicators such as inflation and interest rates. “We haven’t seen this kind of economic warfare in decades,” he said.
Even before Trump took office, it was notoriously difficult for climate companies to raise funding in the so-called “missing middle,” when startups are too mature for early-stage venture capital but not mature enough for traditional infrastructure investors to take a bet on them. This is exactly the point at which government support — say, a loan guarantee from the Department of Energy’s Loan Programs Office or a grant from the DOE’s Office of Clean Energy Demonstrations — could be most useful in helping a company prove its commercial viability.
But now that Trump has frozen funding — even some that’s been contractually obligated — companies are left with fewer options than ever to reach scale.
One investor who wished to remain anonymous in order to speak more openly told me that “a lot of the missing middle companies are living in a dicier world.” A 2023 white paper on “capital imbalances in the energy transition” from S2G Investments, a firm that supports both early-stage and growth-stage companies, found that from 2017 to 2022, only 20% of climate capital flowed toward companies at this critical inflection point, while 43% went to early-stage companies and 37% towards established technologies. For companies at this precarious growth stage, a funding delay on the order of months could be the difference between life and death, the investor added. Many of these companies may also be reliant on debt financing, they explained. “Unless they’ve been extremely disciplined, they could run into a situation where they’re just not able to service that debt.”
The months or even years that it could take for Trump’s rash funding rescission to wind through the courts will end up killing some companies, Beebe told me. “And unfortunately, that’s what people on the other side of this debate would like, is just to litigate and escalate. And even if they ultimately lose, they’ve won, because startups just don’t have the balance sheets that big companies would,” he explained.
Kra’s Prelude Ventures has a number of prominent companies in its portfolio that have benefitted from DOE grants. This includes Electric Hydrogen, which received a $43.3 million DOE grant to scale electrolyzer manufacturing; Form Energy, which received $150 million to help build a long-duration battery storage manufacturing plant; Boston Metal, which was awarded $50 million for a green steel facility; and Heirloom, which is a part of the $600 million Project Cypress Direct Air Capture hub. DOE funding is often doled out in tranches, with some usually provided upfront and further payments tied to specific project milestones. So even if a grant has officially been awarded, that doesn’t mean all of the funding has been disbursed, giving the Trump administration an opening to break government contracts and claw it back.
Kra told me that a few of his firm’s companies were on the verge of securing government funding before Trump took office, or have a project in the works that is now on hold. “We and the board are working closely with those companies to figure out what to do,” he told me. “If the mandates or supports aren’t there for that company, you’ve got to figure out how to make that cash last a bunch longer so you can still meet some commercially meaningful milestones.”
In this environment, Kra said his firm will be taking a closer look at companies that claim they will be able to attract federal funds. “Let’s make sure we understand what they can do without that non-dilutive capital, without those grants, without that project level support,” he told me, noting that “several” companies in his portfolio will also be impacted by Trump’s ever-changing tariffs on imports from Canada, Mexico, and China. Prelude Ventures is working with its portfolio companies to figure how to “smooth out the hit,” Kra told me later via email, but inevitably the tariffs “will affect the prices consumers pay in the short and long run.”
While investors can’t avoid the impacts of all government policies and impulses, the growth-stage firm G2 Venture Partners has long tried to inoculate itself against the vicissitudes of government financing. “None of our companies actually have any exposure to DOE loans,” Brook Porter, a partner and co-founder at G2, told me in an email, nor have they received government grants. If you add up the revenue from all of the companies in G2’s portfolio, which is made up mainly of sustainability-focused startups, only about 3% “has any exposure to the IRA,” Porter told me. So even if the law’s generous clean energy tax credits are slashed or the programs it supports are left to languish, G2’s companies will likely soldier on.
Then there are the venture capitalists themselves. Many of the investors I spoke with emphasized that not all firms will have the ability or will to weather this storm. “I definitely believe many generalist funds who dabbled in climate will pull back,” Beebe told me. Porter agreed. “The generalists are much more interested in AI, then I think in climate,” he said. It’s not as if there’s been a rash of generalist investors announcing pullbacks, though Kra told me he knows of “a couple of firms” that are rethinking their climate investment strategies, potentially opting to fold these investments under an umbrella category such as “hard tech” instead of highlighting a sectoral focus on energy or climate, specifically.
Last month, the investment firm Coatue, which has about $70 billion in assets under management, raised around $250 million for a climate-focused fund, showing it’s not all doom and gloom for the generalists’ climate ambitions. But Porter told me this is exactly the type of large firm he wouldexpect to back out soon, citing Tiger Global Management and Softbank as others that started investing heavily during climate tech’s boom years from 2020 to 2022 that he could imagine winding down that line of business.
Strategic investors such as oil companies have also been quick to dial back their clean energy ambitions and refocus their sights on the fossil fuels championed by the Trump administration. “Corporate venture is very cyclical,” Beebe told me, explaining that large companies tend to make venture investments when they have excess budget or when a sector looks hot, but tighten the purse strings during periods of uncertainty.
But Cody Simms, a managing partner at the climate tech investment firm MCJ, told me that at the moment, he actually sees the corporate venture ecosystem as “quite strong and quite active.” The firm’s investments include the low-carbon cement company Sublime Systems, which last year got strategic backing from two of the world’s largest building materials companies, and the methane capture company Windfall Bio, which has received strategic funding from Amazon’s Climate Pledge Fund. Simms noted that this momentum could represent an overexuberance among corporations who just recently stood up their climate-focused venture arms, and “we’ll see if it continues into the next few years.”
Notably, Sublime and Windfall Bio both also have millions in DOE grants, and another of MCJ’s portfolio companies, bio-based chemicals maker Solugen, has a “conditional commitment” from the LPO for a loan guarantee of over $200 million. Since that money isn’t yet obligated, there’s a good chance it might never actually materialize, which could stall construction on the company’s in-progress biomanufacturing facility.
Simms told me that the main thing he’s encouraging MCJ’s portfolio companies to do at this stage is to contact their local representatives — not to advocate for climate action in general, but rather “to push on the very specific tax credit that they are planning to use and to talk about how it creates jobs locally in their districts.”
Getting startups to shift the narrative away from decarbonization and climate and toward their multitudinous co-benefits — from energy security to supply chain resilience — is of course a strategy many are already deploying to one degree or another. And investors were quick to remind me that the landscape may not be quite as bleak as it appears.
“We’ve made more investments, and we have a pipeline of more attractive investments now than we have in the last couple of years,” Porter told me. That’s because in spite of whatever havoc the Trump administration is wreaking, a lot of climate tech companies are reaching a critical juncture that could position the sector overall for “a record number of IPOs this year and next,” Porter said. The question is, “will these macro uncertainties — political, economic, financial uncertainty — hold companies back from going public?”
As with so many economic downturns and periods of instability, investors also see this as a moment for the true blue startups and venture capitalists to prove their worth and business acumen in an environment that’s working against them. “Now we have the hardcore founders, the people who really are driven by building economically viable, long-term, massively impactful companies, and the investors who understand the markets very well, coming together around clean business models that aren’t dependent on swinging from one subsidy vine to the next subsidy vine,” Beebe told me.
“There is no opportunity that’s an absolute no, even in this current situation, across the entire space,” the anonymous climate tech investor told me. “And so this might be one of the most important points — I won’t say a high point, necessarily — but it might be a moment of truth that the energy transition needs to embrace.”
On the energy secretary’s keynote, Ontario’s electricity surcharge, and record solar power
Current conditions: Critical fire weather returns to New Mexico and Texas and will remain through Saturday • Sharks have been spotted in flooded canals along Australia’s Gold Coast after Cyclone Alfred dropped more than two feet of rain • A tanker carrying jet fuel is still burning after it collided with a cargo ship in the North Sea yesterday. The ship was transporting toxic chemicals that could devastate ecosystems along England’s northeast coast.
In a keynote speech at the energy industry’s annual CERAWeek conference, Energy Secretary Chris Wright told executives and policymakers that the Trump administration sees climate change as “a side effect of building the modern world,” and said that “everything in life involves trade-offs." He pledged to “end the Biden administration’s irrational, quasi-religious policies on climate change” and insisted he’s not a climate change denier, but rather a “climate realist.” According toThe New York Times, “Mr. Wright’s speech was greeted with enthusiastic applause.” Wright also reportedly told fossil fuel bosses he intended to speed up permitting for their projects.
Other things overheard at Day 1 of CERAWeek:
The premier of Canada’s Ontario province announced he is hiking fees on electricity exported to the U.S. by 25%, escalating the trade war kicked off by President Trump’s tariffs on Canadian goods, including a 10% tariff on Canadian energy resources. The decision could affect prices in Minnesota, New York, and Michigan, which get some of their electricity from the province. Ontario Premier Doug Ford estimated the surcharge will add about $70 to the monthly bills of affected customers. “I will not hesitate to increase this charge,” Ford said. “If the United States escalates, I will not hesitate to shut the electricity off completely.” The U.S. tariffs went into effect on March 4. Trump issued another 30-day pause just days later, but Ford said Ontario “will not relent” until the threat of tariffs is gone for good.
There was a lot of news from the White House yesterday that relates to climate and the energy transition. Here’s a quick rundown:
The EPA cancelled hundreds of environmental justice grants: EPA Administrator Lee Zeldin and Elon Musk’s so-called Department of Government Efficiency nixed 400 grants across environmental justice programs and diversity, equity, and inclusion programs worth $1.7 billion. Zeldin said this round of cuts “was our biggest yet.”
Transportation Secretary Sean Duffy rescinded Biden memos about infrastructure projects: The two memos encouraged states to prioritize climate change resilience in infrastructure projects funded by the Bipartisan Infrastructure Law, and to include under-represented groups when planning projects.
The military ended funding for climate studies: This one technically broke on Friday. The Department of Defense is scrapping its funding for social science research, which covers climate change studies. In a post on X, Defense Secretary Pete Hegseth said DOD “does not do climate change crap. We do training and war fighting.”
Meanwhile, a second nonprofit – the Coalition for Green Capital – filed a lawsuit against Citibank over climate grant money awarded under the Inflation Reduction Act but frozen by Zeldin’s EPA. Climate United filed a similar lawsuit (but targeting the EPA, as well as Citibank) on Saturday.
A new report from the Princeton ZERO Lab’s REPEAT Project examines the potential consequences of the Trump administration’s plans to kill existing EV tax credits and repeal EPA tailpipe regulations. It finds that, compared to a scenario in which the current policies are kept in place:
“In other words, killing the IRA tax credits for EVs will decimate the nascent renaissance in vehicle and battery manufacturing investment and employment we’re currently seeing play out across the United States,” said Jesse Jenkins, an assistant professor and expert in energy systems engineering and policy at Princeton University and head of the REPEAT Project. (Jenkins is also the co-host of Heatmap’s Shift Key podcast.)
REPEAT Project
The U.S. installed nearly 50 gigawatts of new solar power capacity last year, up 21% from 2023, according to a new report from the Solar Energy Industries Association (SEIA) and Wood Mackenzie. That’s a record, and the largest annual grid capacity increase from any energy technology in the U.S. in more than 20 years. Combined with storage, solar represents 84% of all new grid capacity added in 2024.
SEIA and Wood Mackenzie
Last year was “the year of materialization of the IRA,” with supply chains becoming more resilient and interest from utilities and corporate buyers growing. Installations are expected to remain steady this year, with little growth, because of policy uncertainty. Total U.S. solar capacity is expected to reach 739 GW by 2035, but this depends on policy. The worst case scenario shows a 130 GW decline in deployment through 2035, which would represent $250 billion in lost investments.
“Last year’s record-level of installations was aided by several solar policies and credits within the Inflation Reduction Act that helped drive interest in the solar market,” said Sylvia Levya Martinez, a principal analyst of North America utility-scale solar for Wood Mackenzie. “We still have many challenges ahead, including unprecedented load growth on the power grid. If many of these policies were eliminated or significantly altered, it would be very detrimental to the industry’s continued growth.”
Tesla shares plunged yesterday by 15%, marking the company’s worst day on the market since 2020 and erasing its post-election stock bump.