Podcast Summary: Open Circuit – "Clean energy didn’t collapse in 2025. It adapted."

Host: Stephen Lacey (with co-hosts Jigar Shah & Caroline Golan)
Date: February 27, 2026
Produced by: Latitude Media

Episode Overview

In this episode, the Open Circuit team explores how clean energy weathered—and in many ways thrived—through the turbulence and uncertainty of 2025. Contrary to some bleak forecasts, the sector adapted to policy whiplash, tariff uncertainties, and investment volatility, with capital shifting strategically instead of fleeing. The hosts dig into new market intelligence, break down investment and technology trends, examine the impacts of shifting trade policies, and highlight the evolving landscape for solar, storage, and project finance—even as the rules keep changing.

Key Discussion Points & Insights

1. The Big Picture: Surviving Policy Volatility

• Despite predictions of doom with aggressive new tariffs and volatile trade policy, clean energy capital didn't flee—though investment became more targeted.
• Growth slowed and volatility increased, yet overall capital in the sector actually rose in 2025, especially for renewables and battery storage.
  • "The system absorbed it." (Stephen Lacey, 01:15)
  • Policy uncertainty, rather than high prices, remains the most significant driver of volatility and higher capital costs.
    "Policy certainty sort of drives investment certainty. ... When you make it hard for new entrants, you make a lot of ambiguity around how you're going to meet demand growth." (Caroline Golan, 09:56)
• Existing projects insulated themselves from shifting rules, while new entrants faced higher hurdles.

2. Capital Markets & Investment Flows (Crux Report Insights)

• Most project finance, construction lending, and bridge lending activity remained steady, with 80% going to renewable electricity and batteries—front-loaded before policy turbulence intensified.

• Manufacturing investment fell 20% year-over-year, with more than $22 billion in canceled projects.

• The capital flowed selectively—focusing on projects with secure offtake contracts and safe harbor from shifting tax credit rules.

• New Entrants Squeezed: Increased risk premiums due to policy uncertainty made it harder for newcomers and thin-margin projects, threatening market competition and long-term pricing.

3. Market Adaptations & Innovations in Deal Structures

• Notable trends:
  • Hybrid tax credit deals and transferability trades.
  • More bridge financing tied to domestic content requirements.
  • Some investors exploring models without federal tax credits, as higher electricity prices sometimes offset lost credits (13:54).
  • Emergence of direct capex investment by large, well-capitalized buyers (i.e., digital infrastructure and hyperscalers) to secure long-term offtake and lower operational costs.
    "They're going to start using their capital because it's secure and also it's going to be tied to their own offtake." (Caroline Golan, 26:09)
  • Early discussions about the resurgence of "yieldco" structures and possible increased use of public capital markets (21:13).
• As risks and compliance challenges rise, especially around tax credits and "foreign entity of concern" rules, capital markets are becoming more disciplined and selective, with sponsors needing stronger balance sheets.

4. Impact of Tariffs and Foreign Entity of Concern (FIAC) Rules

• The solar and storage industries stockpiled "safe harbored" projects (~170 GW through July 2025), insulating a large pipeline from new restrictions (13:54, 28:37).
• Compliance with FIAC rules led to rapid supply chain changes and some creative restructuring of project ownership.
  • The rules are driving fundamental changes, including attempts by some major companies to shed Chinese ties.
  • Flexibility and expert legal/tax navigation are crucial for survival.
    "If you're not good [at] tariffs, you have no business being in the solar industry. Everyone in the solar industry is an expert at class five roller coaster rides." (Jigar Shah, 29:09)
• Some developers are opting to forgo tax credits altogether—opting for cheaper, noncompliant Chinese batteries due to cost advantages (53:08).

5. Manufacturing Investment & Industrial Strategy

• Significant slowdown in domestic manufacturing and loss of "first-of-a-kind" plant investment, especially where end markets are uncertain (38:58).
• Most investment is flowing into relatively conventional wind, solar, and battery deployment—not next-gen clean energy manufacturing.
• The digital economy, particularly data centers, is attracting more investment, resources, labor, and political emphasis than manufacturing (41:19).

6. Solar and Battery Market Resilience

• Despite all the headwinds, solar and especially battery storage continue to post strong growth:
  • Battery storage deployment grew 30% year-over-year, with 57 GWh installed in 2025 and projected 70 GWh in 2026 (45:54).
  • "The numbers were breathtaking ... Roughly 19 gigawatts of capacity has single-handedly saved the entire Texas market for the last two years." (Jigar Shah, 45:54)
  • Solar demand also remains strong, with developers and financiers finding "paths through" tariff and FIAC risks, though residential and manufacturing sectors remain choppier.
• Batteries are increasingly used not just for transmission and reliability but for distribution and grid support—opening a "hockey stick" growth phase (47:50).
  • Ongoing fights over who should own and optimize batteries—utilities versus the private sector—will shape access to stacked revenue streams and innovation (53:08).

7. Role of Gas, Batteries, and Grid Tied versus Off-Grid Development

• Data center operators and "digital infrastructure" are increasingly hedging with gas generation behind the meter, mainly as a short-term response to grid interconnection constraints and policy uncertainty (59:39).
• Batteries are ultimately expected to dominate as the technology and contract structures evolve; the grid's firming capacity for large-scale off-grid gas is limited and risky (56:44).
  • "If you're going to be so bold as to say, I can build this thing off grid, go with God, ... but don't come crying to me later when it doesn't work." (Jigar Shah, 56:44)

Notable Quotes & Memorable Moments

• On Clean Energy's Maturity:
  "We're not talking anymore, except for completely uneducated people, about the future of our industry. The industry is fine. ... There are people that have allocated $100 billion to the sector. They're going to keep investing $100 billion ... they've already raised it and allocated it for our sector."
  — Jigar Shah (12:56)
• On Project Finance Selectivity:
  "The investment market is unclear where Trump is going ... if the cost of capital is uncertain ... you’re going to lose new entrants ... that can add up to gigawatts of projects that don't go through because they don't pencil anymore."
  — Caroline Golan (12:02)
• On Navigating Tariffs and Compliance:
  "If you're not good [at] tariffs, you have no business being in the solar industry ... everyone in the solar industry is an expert at class five roller coaster rides. If you've got a queasy stomach, you shouldn't be on this ride."
  — Jigar Shah (29:09)
• On Battery Market Growth:
  "This is hockey stick territory and you're going to start seeing just gargantuan amounts of batteries deployed, not just ... on the transmission circuit ... but actually largely on the distribution circuit moving forward."
  — Jigar Shah (47:50)
• On Digital Infrastructure and Gas:
  "The move right now to integrating gas behind the meter is largely because the data centers were told to and also because it’s a hedge."
  — Caroline Golan (59:39)
• On Resilience and Industry Outlook:
  "I don't think there's any way to suggest that we are going to find a more hostile year for the industry than 2025. ... I think that we've weathered the worst of it. ... This is the only supply chain that's infinitely scalable ... all roads lead through solar and battery storage."
  — Jigar Shah (63:31) "Oh, it's absolutely resilience. ... The demand is still there ... The more creative the industry can be in working together ... sky's the limit and I think this is storage ... this is this storage story moving forward."
  — Caroline Golan (64:50)

Key Segment Timestamps

• [09:56] – Caroline Golan on capital market selectivity and new entrant squeeze
• [12:56] – Jigar Shah on project safe harbored gigawatts & industry scale
• [16:22] – Tax credit market growth, risks, and changes in pricing
• [21:13] – Innovations in deal structures, yieldcos, and public markets
• [28:37] – FIAC rules and structuring safe harbor projects
• [33:04] – Project slowdowns, due diligence, and capital discipline due to FIAC
• [38:58] – Manufacturing investment decline and policy signals
• [41:19] – Capital and resource constraints from digital sector (data centers)
• [45:54] – Solar & battery resiliency, latest capacity numbers, future outlook
• [53:08] – Ownership, value stacking in storage, and skirting FIAC rules with Chinese batteries
• [56:44] – Jigar’s blunt take on practical limitations of behind-the-meter gas for data centers
• [62:55] – Hosts’ closing reflections: resiliency, risks, and the road ahead

TL;DR Takeaway

Clean energy not only survived the shocks of 2025—policy chaos, tariffs, and wildly shifting regulatory environments—but proved its resilience through adaptation, innovation, and creative dealmaking. Project finance became more selective; tax credit and compliance challenges forced structural changes; solar and especially batteries picked up the slack left by weakened manufacturing appetite. The sector’s upward trend, robust capital flows, and ability to adapt to turbulence signal that clean energy is not just enduring volatility—it’s maturing into a core pillar of the modern energy system.