Federal funding withdrawals and permitting changes contributed to cancelling or halting 7 GW of renewable energy projects on federal land in 2025, with currently another 12 GW threatened on federal lands and 80 GW on private lands, according to an analysis by Wood Mackenzie. That is more than $121 billion in renewable energy investments at risk from federal changes.
“Federal friction: permitting risk across the US utility-scale renewables pipeline,” the new report from Wood Mackenzie, states that when the Dept. of the Interior (DOI) issued a renewable energy permitting memorandum in July 2025, it extended permitting timelines and increased scrutiny for any wind or solar project involving a federal agency.
“Permitting risk varies by technology, though permitting for wetland areas remain the primary constraint across solar, wind and energy storage. Wetlands account for the majority of private land exposure, with risk concentrated in Oregon, Alabama, Maine, Minnesota and Montana. However, wind projects are more constrained by airspace permitting. Since 2025, dozens of gigawatts of early-stage capacity have been cancelled or stalled across solar, wind and energy storage. However, it’s important to note that not all cancellations are due to permitting challenges. Some also stem from supply chain constraints and tighter financing conditions,” said Kaitlin Fung, senior research analyst at Wood Mackenzie.
The analysis indicates that 30% of solar’s pipeline is at risk of additional review. Wind, however, has the highest proportional exposure, with 62% of its pipeline affected (excluding the ongoing FAA halt). Energy storage has more than one-quarter of planned capacity facing heightened permitting scrutiny.
With these new permitting rules, Wood Mackenzie is reporting that 32% of the early-stage project pipeline is now subject to additional federal review — those that are announced, under development or already permitted. Projects scheduled for 2029 are the most at risk of additional review on federal lands, which could jeopardize their tax credit eligibility. Most of these projects are in Texas, California and Arizona, where concentrated federal oversight may delay commercial operation dates beyond planned timelines.
Policy developments offer some relief
In April 2026, a federal court issued a preliminary injunction blocking these new restrictions and expanded reviews for wind and solar projects, finding them likely unlawful under the Administrative Procedure Act. It doesn’t solve the permitting bottleneck, but it limits further disruption from federal permitting processes.
Separately, the Simplifying Permitting and Ending Endless Delays Act, approved by the House in December 2025 and currently awaiting further approvals, proposes to narrow the scope of environmental reviews, reduce duplication across agencies and introduce stricter timelines for permitting decisions.
“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. “For storage in particular, where development is often tied to solar, permitting uncertainty has a compounding effect. The policy landscape is shifting quickly, and developers who can anticipate where the friction points are will be better positioned to protect their timelines and maintain project bankability.”
News item from Wood Mackenzie
