Demand continues to drive power projects despite federal policy uncertainty

Despite the uncertainty that has plagued 2025, especially when it comes to power generation projects, the need for more generation capacity continues to drive development, panelists said at Infocast's Energy Independence Summit in Houston, Texas.

"There's always change and this year, the summer was a lot of trying to figure out what policy would come," Nate Sweet, director of mergers and acquisitions at Primergy Solar, said during an Oct. 23 session.

There has been a lot of waiting and reacting, while trying to be proactive, he added.

"Having policy certainty toward the end of this year has been really helpful, but obviously, uncertainty is just not helpful," Sweet said.

It has been frustrating to figure out what will happen, he added.

"The undertones of all of this, while there has been some uncertainty on policy, is really excitement," Sweet said. "There's a lot of energy that needs to be deployed."

Erika Taugher, renewable energy director at Pattern Energy, strongly believes that the industry needs to be diversified.

"I think we need both sides to really come together, and I think partnerships are going to be really important," she said.

One example she gave was solar partnering with natural gas and adding carbon capture. Projects like this would help with the intermittency of wind and solar resources.

Capital challenges

"I think the challenges over the last five years have really benefitted the larger and more experienced developers that are very prudent about moving projects forward," Sweet said.

Moving into 2026, Sweet said he sees two M&A markets.

"You see that at the projects, where the projects have to post sometimes tens of millions of dollars nonrefundable before they even fully understand their interconnection costs, let alone have the permit or have the binary risks solved for," Sweet said. "That was part of the intent of the queue reforms, was to make people 'fish or cut bait' and clear out the queues with speculative projects. The industry is starting to see some projects that developers just can't bring forward because it's too expensive, he added.

"I think there is an opportunity for buyer-friendly market there on the project side," Sweet said.

Next year could be a buyer-friendly year in some ways, he added.

"On the flipside, there's a dearth of projects that have been fully de-risked and are ready to come online in the near term," Sweet said.

The projects and the developers that are able to bring good projects forward will command a premium, whether that's on the power side or if they're looking for a sponsor-level investment, he added, about demonstrating the ability to navigate all of those risks appropriately and not put capital into the wrong places and be able to monetize the projects in an appropriate way.

"There's so much demand for projects that are ready to come online," Sweet said. "I think the capital is still there, whether that's American capital or overseas capital. There's still new capital flowing in and capital staying in US clean energy, but also the energy space in general."

Power demand remains

Even if tax incentives go away, the demand for more power generation will still be there, Shariff Barakat, a partner at Akin, said during an Oct. 22 panel.

"These projects are going to get built and whether it is the federal government subsidizing them or technology companies having to pay up in [power purchase agreements], there's going to be a healthy demand for growing power," Barakat added.

Tim Tarpley, president of Energy Workforce & Technology Council, said developers have to have a business model that is sustainable without tax credits.

"The tax credits can be a benefit, can help support the goals, but given how back and forth energy policy has been during the past two administrations, I think you have to really build out a model that can be sustainable without those credits," Tarpley said.

The biggest challenges are federal permitting reforms, which likely won't happen during the government shutdown, and tariffs, he added.

"Our companies are having a difficult time moving their supply chains quite as fast as the tariff structure is designed to push or see shortage of certain products that simply can't be forged here quick enough and that is limiting the ability to meet this challenge."