US solar developer Pine Gate Renewables LLC has become the first major industry casualty since Donald Trump signed the‘Great American Energy Act’on 4 July,filing for Chapter 11 bankruptcy protection.According to court documents,the company’s assets and liabilities are each valued between$100 million and$10 billion,and lenders have initiated a court-supervised sale of its projects.
Analysts cited by the Financial Times explain that the accelerated phase-out of the federal Investment Tax Credit(ITC)triggered by the Act has led to a sharp drop in project valuations.Having raised over$7 billion since 2016 and borrowed$450 million prior to the deterioration of the credit market this year,Pine Gate’s financial resilience was destroyed by the policy shift.
Trump described the Act as a patriotic victory for energy independence,but its removal of clean energy tax credits and tighter industry regulations have undermined the sector’s funding base.According to Global Times,the Act reduced the original ITC window of 2034 to just 12 months after signing,thereby ending the essential 30%cost credit for project profitability.
Pine Gate’s collapse is not an isolated case.In June,the rooftop solar firm Sunnova Energy filed for bankruptcy,citing liabilities between$1 billion and$50 billion.SunPower issued a going concern warning and stopped accepting new customers,while Canadian Solar secured a new debt lifeline of$415 million.According to data from China Energy News,over ten major US solar firms failed in 2023,and the industry slump is expected to continue into 2025.
Analysts at Jefferies have noted that the sector’s fragile business model relies heavily on subsidies and have warned that more bankruptcies may follow amid rate hikes and policy uncertainty.While the American Clean Power Association condemned the act as a step backwards for energy policy,the American Petroleum Institute hailed it as transformative legislation,reflecting the intense divisions within the industry.
The US solar sector is facing a period of decline due to the sudden policy shift.As analysts have observed,this highly leveraged industry was always destined to collapse when the policy support that sustained it disappeared.
