Trump attack on US clean energy progress boosting Canada as a ‘preferred investment destination’
US renewables developers are taking a fresh look at Canada’s roster of wind and solar projects in the wake of President Donald Trump’s One Big Beautiful Bill Act, which stripped the American sector of key clean energy investment tax credits set up under the Biden administration.
A senior executive at the Canadian Renewable Energy Association (CANREA), an industry body, confirmed that “at least a dozen” of its members involved in developing projects in the US have said they are “looking to Canada as a place to invest because of our stable policy framework.”
“They increasingly see Canada as a preferred destination for investing in renewable energy and energy storage,” Fernando Melo, federal director of policy and government affairs, told Canada’s National Observer.
Developers CANREA has spoken with see Ottawa’s commitment to an output-based power pricing system and clean economy investment tax credits, coupled with pledges from provinces including BC, Ontario and Quebec to hold regular procurements of new generation, as “all very positive for investment,” he said.
US clean energy players’ renewed interest in the Canadian market has been growing since Trump’s return to the White House last November, due to concerns of the negative market impact of his well-known animus towards wind power — including stymying further development of the US offshore sector on day one of his second term — and other “bullshit” renewables technologies, as he’s called them.
Although Canada is a significantly smaller renewables market than the US’s $300 billion (C$410 billion) play, the country’s provinces and territories have planned power procurements totalling more than 18,000 megawatts (MW) coming up in the next year that could lead to almost $35 billion in new investment, according to CANREA.
“We are starting to see a potential reorientation of capital thanks to the BBB [Big Beautiful Bill], but we don’t have specific numbers on this yet,” Melo noted.
“US developers increasingly see Canada as a preferred destination for investing in renewable energy and energy storage,” says Fernando Melo, federal director of policy and government affairs at CANREA
Minister of Environment and Climate Change Julie Dabrusi recently held closed-door meetings with CANREA to discuss creating new investment opportunities for renewable energy and energy storage during this “dynamic moment for the sector” globally.
Clean energy tax credits
Development of this clean energy resource is gaining gloss following Trump’s gutting of the US investment tax credits and boosting the appeal of Canada’s clean electricity investment tax credit — a 15 per cent credit for renewable energy-based generation, storage, and transmission projects — that had been broadly seen as “incentive enough” when it was unveiled in last year’s Fall Economic Statement, said Melo.
John Dalton, president of Power Advisory, a US energy sector consultancy, said last week’s US legislative changes, including the phasing out of wind and solar project investment tax credits “on an accelerated basis, make Canada a more attractive market for clean energy development.”
He said that though Canada’s government is currently “appropriately focused” on nation-building projects, Canadian renewables projects would be needed in the longer-term to help US states meet their clean energy targets.
“The economics of these export projects are strengthened by the loss of the wind and solar tax credits in the US,” he added.
However, several US developers contacted by Canada’s National Observer, including one that had been building and operating wind projects in Canada for a decade, declined to comment, with sources suggesting many feared political backlash from the fossil fuel industry-supporting Trump administration.
Mark Kalegha, an analyst with the Institute for Energy Economics and Financial Analysis, a market and policy research group, said that while Canada’s renewables sector presented a sizeable opportunity for US players, Ottawa needed to guard against having its clean energy policies negatively influenced by the anti-renewables shift in Washington.
“For such an event to result in material movement of capital, folks will need to be convinced that similar policy shifts will not occur in Canada,” he warned.
Slow-down in green growth
After growing steadily in the past decade, Canada’s renewable energy roll-out slowed last year.
Nationwide, a scant 314 MW of solar power was switched on in 2024, down from 765 MW the year before, as total production capacity reached 4,000 MW, according to figures from CANREA.
Wind power has fared little better, the data showed, with the installation of 1,434 MW of turbines last year, down from 1,775 MW in 2023, as the fleet expanded to almost 18,500 MW.
Overall capital spending on power generation in Canada between 2021-25 averaged US$7.3 billion a year — $5.3 billion of which went into renewables projects, the International Energy Industry stated in its latest World Energy Investment report. The remaining $2 billion was split between new fossil fuel and nuclear developments.
Clean energy spending numbers in the country are still up compared to 2016-2021, when renewables saw $3.3 billion in capital expenditure, while fossil and nuclear saw $1 billion and $1.2 billion invested, respectively.
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