--- title: The Federal Reserve Just Gave Clean Energy Companies a Gift description: But the rate cut still might not be enough. canonical: https://time.com/7318964/federal-reserve-interest-rate-clean-energy/ author: Justin Worland article:opinion: false article:content_tier: free article:published_time: 2025-09-19T17:39:20.000Z article:modified_time: 2026-03-11T00:17:35.935Z article:section: Climate og:title: The Federal Reserve Just Gave Clean Energy Companies a Gift og:description: But the rate cut still might not be enough. og:url: https://time.com/7318964/federal-reserve-interest-rate-clean-energy/ og:site_name: TIME og:image: https://static.time.com/v3/assets/bltea6093859af6183b/bltd9474483eea32914/6998c9e307a30da14577d541/federal-reserve-solar-panels.jpg?branch=production&width=1024&quality=75&auto=webp&crop=16:9 og:image:width: 1024 og:image:height: 576 og:image:alt: US Renewable Investments Fell 36% On Trump's Policies og:type: article twitter:card: summary_large_image twitter:title: The Federal Reserve Just Gave Clean Energy Companies a Gift twitter:description: But the rate cut still might not be enough. twitter:image: https://static.time.com/v3/assets/bltea6093859af6183b/bltd9474483eea32914/6998c9e307a30da14577d541/federal-reserve-solar-panels.jpg?branch=production&width=1024&quality=75&auto=webp&crop=16:9 ---  # The Federal Reserve Just Gave Clean Energy Companies a Gift > Sponsored content. 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In the Loop is TIME's AI newsletter, built on original reporting and access to the people building and governing AI. It publishes Tuesdays and Fridays and is free at time.com/newsletters. #### Who writes TIME's In the Loop? Harry Booth, a tech reporter at TIME, writes In the Loop. #### Is In the Loop free? Yes. In the Loop is free at time.com/newsletters.  by [Justin Worland](https://time.com/author/justin-worland/)  ## Justin Worland Senior Correspondent Sep 19, 2025 5:39 PM UTC  Solar panels in Richmond, Calif. on Aug. 28 Solar panels in Richmond, Calif. on Aug. 28 David Paul Morris/Bloomberg—Getty Images  by [Justin Worland](https://time.com/author/justin-worland/)  ## Justin Worland Senior Correspondent Sep 19, 2025 5:39 PM UTC For the first time this year, the Federal Reserve cut interest rates this week. As it typically does, the highly anticipated move has helped deliver a boost to stocks this year. Of course, the Fed isn’t thinking about climate policy as it sets rates. Indeed, it has actively avoided talking about it under the current administration. Nonetheless, monetary policy has become a powerful yet underappreciated tool for advancing clean energy. In ordinary times, a rate cut would be a particular boon to clean energy companies. It seems like almost every year the news gives me an [opportunity](https://time.com/6281021/renewable-energy-interest-rates/) to [write about](https://time.com/6977014/jerome-powell-interest-rates-climate-change/) the connection between rates and clean energy buildout. In general, lower interest rates benefit growth-oriented, long-horizon investments. Renewable energy companies and their projects—largely, wind and solar farms—tend to fit that profile. They require a lot of upfront capital and relatively low long-term operating costs. Fossil fuel infrastructure, on the other hand, requires continual fuel purchases. Interest rates often feature prominently in the financial disclosures of clean power companies. And these firms do whatever they can to mitigate the risk posed by higher rates using complex financial instruments like swaps, in which a developer might agree to “swap” a floating interest rate on its debt for a fixed one with a bank to lock in predictable payments even if market rates swing. It is not a coincidence that renewable energy has expanded rapidly during recent periods of near-zero interest rates. In the 2010s, for example, solar capacity in the U.S. [grew](https://seia.org/news/solar-industry-sets-records-2020-track-quadruple-2030/) dozens of times over. Undoubtedly, the Fed’s move will provide a tail wind to clean energy investments as potential projects benefit from better economics. But this time around there is less cause for celebration than there might have been just a year ago. As I wrote [earlier](https://time.com/7315119/trump-wind-power-free-market/) this month, the Trump Administration has sought to slow renewable energy deployment beyond simply cutting subsidies with a full frontal assault on the industry. The administration has centralized permitting, with the implicit goal of halting projects, and even gone so far as issuing stop work orders to projects already underway. That assault is already having a concrete chilling effect on the market. A [recent report](https://cleanpower.org/news/clean-power-quarterly-market-report-q2-2025) from American Clean Power, the primary trade association for the renewables industry, shows a flatlining in renewable energy deployment over the equivalent period last year. Some companies and projects with favorable economics will find a way to hold on through this period of extreme uncertainty. After all, [demand for power](https://time.com/7311613/ai-electricity-bills-georgia-politics/) is growing rapidly in the U.S. and clean energy—particularly solar power combined with storage—remains an attractive proposition in many places. The Fed has received a lot of attention from climate advocates for how it has engaged in these policy discussions. During the Biden presidency, the Fed joined the Network for Greening the Financial System, a coalition of central banks trying to accelerate sustainable finance. It then promptly left the group just before Trump’s inauguration in January. But, in a way, the Fed’s biggest climate impact may come through its day-to-day work setting rates and trying to control inflation. With this work, the Fed has just given clean energy companies a gift. The Trump Administration will determine if and when clean power companies can actually accept it. _To get this story in your inbox, subscribe to the TIME CO2 Leadership Report newsletter_ [_here_](https://www.time.com/co2-newsletter)_._ ```json [{"@context":"https://schema.org","@type":"NewsArticle","@id":"https://time.com/7318964/federal-reserve-interest-rate-clean-energy/","mainEntityOfPage":{"@type":"WebPage","@id":"https://time.com/7318964/federal-reserve-interest-rate-clean-energy/"},"headline":"The Federal Reserve Just Gave Clean Energy Companies a Gift","datePublished":"2025-09-19T17:39:20.000Z","dateModified":"2026-03-11T00:17:35.935Z","description":"But the rate cut still might not be enough.","url":"https://time.com/7318964/federal-reserve-interest-rate-clean-energy/","keywords":["Leadership Report","climate change"],"thumbnailUrl":"https://static.time.com/v3/assets/bltea6093859af6183b/bltd9474483eea32914/6998c9e307a30da14577d541/federal-reserve-solar-panels.jpg?branch=production&width=1200&quality=75&auto=webp&crop=1200:675&height=675","author":[{"@type":"Person","name":"Justin Worland","jobTitle":"Senior Correspondent","url":"https://time.com/author/justin-worland/"}],"articleSection":"Climate","image":[{"@type":"ImageObject","url":"https://static.time.com/v3/assets/bltea6093859af6183b/bltd9474483eea32914/6998c9e307a30da14577d541/federal-reserve-solar-panels.jpg?branch=production&width=1200&quality=75&auto=webp&crop=1200:675&height=675","width":1200,"height":675,"headline":"US Renewable Investments Fell 36% On Trump's Policies","caption":"US Renewable Investments Fell 36% On Trump's Policies","creditText":"David Paul Morris/Bloomberg—Getty Images","representativeOfPage":true}],"publisher":{"@type":"Organization","name":"Time","url":"https://time.com/","logo":{"@type":"ImageObject","url":"https://time.com/images/logo.png","width":528,"height":156},"foundingDate":"March 3, 1923","sameAs":["https://www.facebook.com/time","https://www.instagram.com/time/?hl=en","https://twitter.com/time","https://www.pinterest.com/timemagazine"]}},{"@context":"https://schema.org","@type":"BreadcrumbList","itemListElement":[{"@type":"ListItem","position":1,"item":{"@id":"/section/climate/","name":"Climate"}},{"@type":"ListItem","position":2,"item":{"@id":"/tag/co2-leadership-report/","name":"Leadership Report"}},{"@type":"ListItem","position":3,"item":{"@id":"https://time.com/7318964/federal-reserve-interest-rate-clean-energy/","name":"The Federal Reserve Just Gave Clean Energy Companies a Gift"}}]}] ```