Geopolitical fractures and trade uncertainty persisted in 2025, yet cross‑border energy trade proved more essential than ever to global stability and growth.

As 2025 drew to a close, the global renewables sector stood at a pivotal crossroads, with strong deployment intersecting with more demanding policy, grid, and financing conditions.  The IEA now expects global renewable power capacity to roughly double by 2030, adding about 4,600 GW, but has revised its 2025–2030 growth forecast down by around 5% versus last year to reflect policy and market headwinds.  For practitioners in project finance, tax equity, M&A, and infrastructure, 2025 underscored familiar themes: deployment urgency, tax‑credit monetization, and deep investor appetite, while also introducing fresh stress‑tests around regulatory clarity, supply‑chain resilience, and risk allocation.  Developers accelerated near‑term buildout, yet long‑term pipeline visibility became more contingent on policy follow‑through, interconnection timelines, and system integration.

Three vectors defined the policy environment: evolving tax‑credit rules, the global shift to competitive procurement, and persistent permitting and grid challenges.  In the United States, post‑OBBBA implementation reshaped clean‑energy tax planning, with new safe‑harbor expectations and foreign‑entity‑of‑concern screening reinforcing scrutiny of construction timing and supply‑chain origin in deal documents.  Globally, competitive auctions became the dominant procurement tool for utility‑scale renewables, with IEA analysis indicating auctions will account for almost 60% of gross capacity additions expected between 2025 and 2030, up from under 25% in the prior forecast.  This shift compressed price visibility, pushed more merchant and hybrid PPA structures, and forced sharper drafting around auction conditions, curtailment, and volumetric risk, especially in markets like Europe, where strong capacity additions coexist with permitting and incentive uncertainty.  Permitting, grid connection, and feedstock‑origin risks remained central, as agencies highlighted that renewables growth is increasingly conditioned on weather, grid readiness, and system integration, while tightening rules on renewable fuels and domestic content elevated origin and FEOC representations in contracts.

The transactional landscape in 2025 was shaped by the rapid rise of transferable tax‑credit markets, asset recycling, and a tighter financing environment.  In the U.S., the market for transferable tax credits scaled quickly, with leading market analyses projecting roughly 55–60 billion dollars of monetization in 2025, driven largely by solar, solar‑plus‑storage, and standalone storage.  Hybrid tax‑equity/transfer structures became more common, and documentation increasingly assumed a tax‑credit buyer universe with granular milestone, compliance, and recapture protections.  M&A activity in power and energy moderated, with volume and valuations under modest pressure, but high‑quality, contracted platforms with low execution risk continued to attract capital.  Higher rates, stickier equipment costs, and policy risk translated into tighter covenants and more conservative underwriting, pushing lenders and sponsors to focus relentlessly on construction milestones, counterparty strength, and risk‑sharing mechanics.

Strategically, three themes stood out: deployment urgency versus pipeline durability, heightened supply‑chain and origin scrutiny, and a pronounced investor flight to quality.  IEA projections indicate that wind and solar will supply the overwhelming majority—over 90%—of incremental global electricity generation growth through 2030, yet the agency’s downgraded forecast underlines that policy, grid, and market‑design constraints are increasingly binding.  Supply‑chain concentration, particularly in solar modules and key materials, remains acute; multiple analyses note that many segments are likely to stay over 90% dependent on Chinese manufacturing through 2030, reinforcing domestic‑content and origin clauses as central deal features.  Investors are prioritizing contracted assets with proven technology, secured interconnection, and clearer policy visibility, while assets with merchant exposure, permitting risk, or unproven technology face tougher valuations and higher hurdle rates.

Looking into 2026, expect a deadline‑driven push to close projects ahead of evolving incentive milestones, continued prominence of storage and hybrid projects, and sharper differentiation between contracted, low‑risk assets and those with merchant exposure or permitting overhangs.  The era of vanilla PPAs is fading, replaced by more tailored, flexible offtake structures and transaction architectures that treat timing risk and supply‑chain provenance as core design variables rather than footnotes.  2025 set the framework; 2026 will test performance, and those who build resilience into structures and adapt quickly to this more demanding environment are likely to capture outsized value.