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Powering tomorrow: Renewables and the road ahead
Navigating the next decade of the US energy transition through policy, investment, and resilience.
Read time: 4 mins Added: 30/10/25
Lloyds North America recently hosted a roundtable during Climate Week NYC, bringing together senior leaders from energy, finance and insurance to discuss the future of renewables. The conversation explored how policy shifts, market dynamics and infrastructure resilience are shaping the energy transition for 2025 and beyond.
Hosted under Chatham House Rules, the discussion was anchored around the implications of the U.S. Big Beautiful Bill and the future of the energy market in the U.S. The conversation explored global comparisons, infrastructure resilience, and the evolving role of natural gas in a mixed energy future.
Host of the roundtable, Farhad Merali, Managing Director, Head of Corporate Coverage and Institutional Coverage – North America, provides five strategic insights on the challenges and opportunities shaping the future of the market.
1. Policy shifts and the investment landscape
The U.S. renewables sector is entering a period of significant transformation. The Big Beautiful Bill introduces new tax provisions – specifically 45Y and 45E – expected to disrupt and likely accelerate project development. With in-service deadlines looming and increased clarity on safe-harbor rules, developers are fast-tracking projects to qualify for incentives. Importantly, participants agreed that the financial, sustainable, and resilience case for renewables remains strong, even without these subsidies.
Many emphasised the need to focus on meeting expanded energy demands globally. “We need to be customer-centric,” one executive noted. “Whether it’s battery storage or hybrid systems, the question is: what do customers want, what’s secure, and how can we meet increasing demand?”
Most participants expect sector consolidation, with larger players preparing for M&A activity as smaller firms face policy uncertainty and funding challenges. However, some suggested that changes to tax equity could level the playing field for smaller sponsors that are less prone to utilising tax equity, democratising access to capital.
2. Resilience and risk
Resilience emerged as a central theme throughout the roundtable. Integrating climate risk into underwriting and investment decisions is increasingly important. With economic losses from natural disaster events reaching $368 billion in 2024 – less than half of which was insured – there is a growing imperative to rethink infrastructure planning.
The Swiss Re 2024 Sustainability Report highlights that many large capital projects are being developed in areas vulnerable to climate extremes, raising questions about long-term viability and risk-adjusted returns.
3. Global perspectives: Europe, the UK, and the U.S.
Comparative insights from Europe, including the UK, added depth to the discussion. European investors remain committed to “deep green” projects, applying stringent sustainability criteria even to logistics. For example, some scrutinise the fuel used to transport wind turbines, reflecting an uncompromising stance on sustainability.
In contrast, U.S. investors take a pragmatic approach, prioritising returns, resilience, and customer demand. Lessons from the UK’s energy transition highlight the need to balance policy shifts with market realities. For global sponsors and institutional investors, understanding these regional nuances is key to portfolio construction and risk management.
4. Natural gas in a mixed energy future
While renewables dominated the conversation, natural gas was repeatedly cited as a critical component of the energy mix. It remains essential for grid stability as intermittent renewables scale and demand rises. “We will fund opportunities, not just renewables,” one participant stated. “Opportunities touch natural gas.” The war in Ukraine, rising energy demand from AI and data centers, and shifting U.S. policy all underscore the need for continued focus on an evolving energy system.
This pragmatic stance reflects a broader recognition that the energy transition will not be linear.
Transmission infrastructure was also identified as a key area of opportunity, and a risk if it is not invested in alongside generation. The need for robust grid capacity becomes increasingly urgent. Customers are reportedly willing to pay a premium for grid reliability, making transmission a compelling investment category – potentially qualifying as “core infrastructure” under evolving definitions.
5. Financial modelling and tax strategy
The Big Beautiful Bill’s changes to depreciation rules and international tax provisions prompted a robust discussion around financial modelling. The removal of the “revenge tax” was welcomed, but the retained authority to double U.S. taxes on income from countries with discriminatory tax regimes raised concerns.
Sponsors are reassessing their international operations and tax planning strategies. The evolving landscape demands agility, with firms needing to model multiple scenarios and stress-test assumptions. For institutional investors, understanding these dynamics is essential for evaluating project economics and long-term viability.
Key takeaways
The roundtable offered a timely, nuanced view of the renewables sector at a pivotal moment. The underlying message: resilience, flexibility, and customer-centricity will be the cornerstones of successful energy transition strategies.
For corporate and institutional investors, the energy transition is not just about shifting energy sources – it’s about resilience. Understanding regional dynamics, anticipating policy changes, and investing in infrastructure that can withstand the tests of time and climate will position portfolios for long-term growth.
As businesses navigate the energy transition, Lloyds North America is here to support you with insights to manage risk and drive growth. Connect with Farhad Merali to discuss these trends further.
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