June 30, 2026
A new report highlights how federal policies are jeopardizing investments of more than $121 billion in renewable energy, with solar energy being the most exposed.
According to a new analysis by Wooden MackenzieAllowing changes and withdrawing federal funding has directly contributed to 7 GW of project cancellations or inactivity on federal lands by 2025. Meanwhile, increased federal oversight could expose another 12 GW on federal lands and 80 GW on private lands.
“Permitting risk varies by technology, although wetland permitting remains the most significant constraint on solar, wind and energy storage,” said Kaitlin Fung, senior research analyst at Wood Mackenzie. “Wetlands account for the majority of private land exposure, with risks concentrated in Oregon, Alabama, Maine, Minnesota and Montana.”
According to the “Federal Friction: Permitting Risk Across the US Utility-Scale Renewables Pipeline” report, a Department of the Interior (DOI) memorandum issued on July 15, 2025, the federal review of nearly all wind and solar projects was centralized, introducing a multi-step approval process that extends permitting deadlines and increases control for any project involving a federal agency.
“Since 2025, dozens of gigawatts of early phase capacity have been canceled or stalled in solar, wind and energy storage,” Fung said. “However, it is important to note that not all cancellations are due to permitting issues. Some also stem from supply chain constraints and tighter financing conditions.”
The analysis shows that solar energy has the largest absolute exposure, with 30% of the pipeline at risk of additional assessment. Energy storage is also significantly affected, with more than a quarter of planned capacity facing increased licensing scrutiny.
Following the implementation of the DOI permit rules, 32% of the early-stage project pipeline is now subject to additional federal review. Early-stage projects include projects that have been announced, are in development, or have already been permitted.
The projects planned for 2029 represent the largest volume of capacity at risk of additional reviews on federal lands, which could jeopardize eligibility for tax credits. Exposure is highest in Texas, followed by California and Arizona, where concentrated federal oversight may delay commercial operation dates beyond planned timeframes.
Policy developments offer possible relief
The policy landscape is actively evolving and Wood Mackenzie is monitoring developments on two fronts that could materially impact the outlook.
In April 2026, a federal court issued a preliminary injunction blocking agency actions that imposed new restrictions and expanded review requirements for wind and solar projects, ruling that they were likely unlawful under the Administrative Procedure Act. While the order does not resolve broader permitting bottlenecks, it limits further disruption and underscores the need for more coordinated and predictable federal permitting processes.
In addition, the Simplifying Permitting and Ending Endless Delays (SPEED) Act, which passed the House of Representatives in December 2025 and is currently awaiting approval by the Senate and Executive, proposes to limit the scope of environmental reviews, reduce duplication of effort between agencies, and implement stricter timelines for permitting decisions. If passed, the SPEED Act could meaningfully shorten permitting times for infrastructure projects, including renewable energy development.
“Permitting remains one of the most critical barriers to advancing new projects, and without more coordinated and predictable processes, delays and uncertainty will continue to weigh on development timelines and investment decisions,” said Gaby Ackermann Logan, research associate at Wood Mackenzie. “Especially for storage, where development is often tied to solar energy, allowing uncertainty has a compounding effect. The policy landscape is changing rapidly, and developers who can anticipate where the bottlenecks lie will be better positioned to protect their timelines and preserve project bankability.”
Tags: market research, policy, utility scale, Wood Mackenzie
