"Despite the Trump administration's opposition to renewables, solar power will likely remain part of datacenter energy supply mix due to its low cost. This is according to financial analyst Jefferies, which says in a research note - shared with The Register - that clean energy companies are going "on the offense" and adapting to the changing times in which they find themselves."
"However, Jefferies notes the budget bill has created regulatory certainty, with clean energy firms now targeting AI datacenter offtake agreements. Nuclear, gas, and even geothermal are better positioned versus wind and solar to meet this demand, the financial analyst claims, but relatively cheap solar energy will play a role. The preference among hyperscale datacenter operators for baseload power, typically supplied by gas turbine generation, will likely hold back the growth of wind and solar power purchase agreements (PPAs), it says,"
Significant cuts in last summer's US budget bill reduced many tax incentives that clean energy projects had benefited from since the Inflation Reduction Act of 2022. An earlier executive order halted all federal approvals for wind energy projects. The budget bill nevertheless created regulatory certainty, prompting clean energy firms to target AI datacenter offtake agreements. Nuclear, gas, and geothermal are relatively better positioned than wind and solar to meet hyperscale AI demand, though cheap solar will still play a role. Hyperscale operators' preference for baseload gas turbine generation will constrain wind and solar PPAs. Energy storage and BESS deployment are emerging as key complementary strategies.
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