Four prominent renewable energy industry veterans talked about what to expect in 2026 and beyond at the annual Infocast Projects & Money conference in New Orleans in mid-January.

The panelists are Sandhya Ganapathy, CEO of EDP Renewables North America, Kevin Smith, CEO of Arevon, Himanshu Saxena, CEO of Lotus Infrastructure Partners, and Andy Redinger, managing director and group head of the utility, power and renewable energy M&A team at KeyBanc Capital Markets. The moderator is Keith Martin with Norton Rose Fulbright in Washington.

Headwind Effects

MR. MARTIN: Solar, wind and battery projects are facing significant headwinds from the Trump administration. The Interior secretary directed no new permits for wind and solar projects without his personal signoff. There is a degree of agency pile on with the US Army Corps, US Department of Agriculture and Environmental Protection Agency also looking for ways to make life harder for wind and solar developers. What effect is this having?

MS. GANAPATHY: We are facing two competing forces. On one side, there is increasing demand for electricity. All of us are ready to deploy large sums of capital to generate that electricity. On the other side, we have one brick after another being thrown at us. It is not just around permits. It is FEOC. It is tariffs and trade barriers.

What capital needs is certainty. If you do not have certainty, you take a step back, pause and reevaluate things. This is affecting speed and scale. We may not see the effects immediately because the projects that are being built currently were permitted some time ago. There will be a ripple effect.

MR. SMITH: At Arevon, we have no projects on federal land. The problem is that even projects on private land have impacts. You have a transmission line crossing a stream. You are on the border of a wetlands area. At least half our development pipeline will have to deal with some kind of Department of Interior issue.

The effects of the delays should start to become more pronounced in the last six months of 2026. By 2027, the gap between electricity supply and demand will have widened further, causing electricity prices to increase further.

We are focusing on community engagement activity at the state and local levels so that if we need to pull in Republican officeholders to help, we can do that on some of our projects.

MR. MARTIN: The Republican governor of Nevada wrote an excellent letter to the Interior secretary, Doug Burgum. Do you know whether he got a response?

MR. SMITH: Our understanding is that the bar against approvals has loosened somewhat in Nevada.

There is now probably a backlog of hundreds of requests on the secretary's desk.

MR. MARTIN: As you suggested, word on the street is that some approvals are starting to be received. It is not clear how many. Sandhya Ganapathy, has there been any effect on determinations of no hazard that developers need from the Federal Aviation Administration to erect new wind turbines or increase the height of repowered turbines?

MS. GANAPATHY: We are seeing delays, especially where there is a radar impact and you need to negotiate mitigation agreements with the Department of Defense. They are just not coming. The DoD needs to come to a conclusion on the determination as well as the mitigation. We continue to see delays. We continue to wait.

Having said that, the industry is moving forward.  The large developers are continuing with wind development in the hope that at some point things will improve. The problem is not just the continuous barrage of new executive orders, but also the lack of instructions to federal agencies about how to deal with industry requests.

MR. MARTIN: Are either of you cancelling projects?

MS. GANAPATHY: We have not cancelled any projects, but we are experiencing significant delays. We are continuing with development. The pace at which we can potentially bring these projects online is being affected.

MR. SMITH: We have not cancelled any projects either. We are experiencing delays. We are looking at workarounds for some projects. Maybe you downsize the project because you had a bit of land that was bordering on a wetlands area. Maybe you re-route a transmission line.

Rush to Transact

MR. MARTIN: Let me broaden the discussion among the entire panel. It seemed last year like the Trump effort to quash wind and solar had the opposite effect. Transaction volume skyrocketed as developers rushed to start construction ahead of a year-end 2025 deadline to avoid new FEOC limits on the amount of Chinese equipment that can be used in projects. Do you agree with that characterization?

MR. REDINGER: Last year was our best year ever. There was more opportunity than we have seen in any past year. We expect that to continue into this year.

There was really no need to be creative from a lending perspective. It was fine to price down the middle of the fairway. I don't think the administration's effort slowed growth in the industry. In fact, they accelerated it.

MR. MARTIN: Is that a comment about the broader market or wind and solar?

MR. REDINGER: Across all the generating technologies, including wind and solar.

MR. SAXENA: The effort to halt wind and solar has had a visible effect. Developers have accelerated work on the good projects in their portfolios to ensure the projects are under construction by July 4 this year to lock in federal tax credits for projects that cannot be completed by the end of 2027.

If your projects were grandfathered last year, great. If not, you are trying everything you can to get your projects under construction by this summer. Customers want these projects. The developers are getting contracts. Power demand is at an all-time high. We are in the process of financing close to a 1,000-MW solar project with a contract with a single customer for all of the capacity.

What is not positive is if you own a renewable energy company with a big pipeline of projects that lack interconnection rights. These projects have effectively become worthless.

There is a bifurcation between the projects that are ready now and the ones that are not. There really is no remaining middle ground.

We expect to see more distressed companies this year that have financed all their good projects but now have a problem of how to keep their remaining projects alive in the face of uncertainty about whether the projects qualify for tax credits.

Smaller developers that have to put up a lot of capital to preserve interconnection rights or order solar panels, transformers or turbines are hurting. Liquidity is drying up for them. We think it is going to become a tale of two cities over the next few months.

MR. SMITH: I agree with that. Near term, there are plenty of projects that are ready to advance that have avoided Department of Interior issues. People are looking at their portfolios and pulling those projects to the top. There are 100,000 megawatts or more of safe-harbor equipment. I am not sure how far that will take us, but certainly through 2026 and the first part of 2027.

We are looking at a lot of M&A opportunities. Maybe you have a great project, but it crosses federal land. How do you value that?  Is it worth anything?  The only price on offer in the M&A market may be entirely success based.

There are developers that are having to start canceling projects or to sell projects for low prices. Projects that do not require federal approvals are getting robust valuations. We have been through similar cycles over the last 20 years where you had tax credits potentially expiring and there was always a rush. The question is what happens after the rush.

MS. REDINGER: The things we are talking about are very short term in nature. This is one of the best buying opportunities we will see. Uncertainty creates opportunity.

There is an opportunity for smart money to step in and acquire projects because we have seen this in our industry over and over again. These issues will get resolved. Every time we run into them, the industry figures out a way to move forward. This is playing out against a backdrop of increasing demand for power. We need the power. These projects cannot get canceled. If they do, they will come back to life because there is no other solution to electricity shortages.

Gas-fired power plants are at least five years away. Nuclear is 10 years away. Wind, solar and batteries are the only solution until then. Projects that are experiencing turbulence may look like they are worthless today. If I had a bunch of money in my pocket, I would make a bet at the right price.

MR. SAXENA: I agree with maybe 90% of that. The part where I disagree is that there are projects with real deadlines under interconnection agreements. If they time out, then they are back to the end of the queue.

We are looking at M&A. There will be some great opportunities. But there are some projects that are not ready now and will be delayed not a year or two, but six or seven years because of interconnection issues.

MR. MARTIN: Sandhya Ganapathy, do you expect another rush by July 4 this year to start construction of more projects?

MS. GANAPATHY: One thing we need to appreciate is we have not only all of this policy-related uncertainty, but also the interconnection process is stuck. No matter what happens, projects are taking six to eight years today to build. We saw a lot of volume in 2025, but those were all projects that were permitted long ago.

People who have the capital, balance sheet and bandwidth will try to accelerate development. The large, seasoned developers will try to start construction of as much additional capacity as possible by July 4.

But that does not mean we will eventually see all of those projects built.

We are accelerating development. We are making sure that the projects are ready as fast as we can to the extent we are able to manage things that are within our control.

Capital Pullback?

MR. MARTIN: Himanshu Saxena, you said this is tale of haves and have-nots. The smaller companies are struggling. Are you seeing capital sources pull back from further funding of smaller companies? Is capital still plentiful for the larger developers?

MR. SAXENA: Developers have become more cautious. They used to talk about the number of megawatts they have under development and the amount of new capacity they expect to bring online each year. What people are now saying is that they do not want to take any view on projects that will not reach construction this year.

There has been a pullback of capital for projects that are not expected to go into the ground until 2027 or 2028. Capital for projects that are not ready to start construction this year seems to have dried up.

People are coming to us asking for capital and if they cannot show that the projects will be ready to start construction this year, we would consider it if it is a question of a couple hundred thousand dollars to preserve a land position, but if it requires millions of dollars, that is the capital that no one is providing in this market.

The reason is that the experience with offshore wind has spooked investors. In the past, there was general optimism about durability of the tax credits. These projects need tax credits to survive. Electricity customers are willing to pay higher prices for power, but not enough to make up for the loss of tax credits.

Despite the rising power demand and rising power prices, these projects still are barely making it. The renewables industry is not swimming in money. We are barely making things work.

Investors might have taken the risk five years ago for projects that will not be under construction for another year or two that the tax credits will be extended. Investors will not make that bet today.

MR. MARTIN: Most large developers have pipelines of projects under development that have locked in tax credits by starting construction of the projects for tax purposes. They have until 2028, 2029 or 2030 to finish.

MR. REDINGER: Anytime I hear the word tax credit, I have to comment. Lazard puts out a levelized cost of energy report every year. The reports suggest that renewables are competitive with any other source of power generation, so why do we need tax credits?

The problem with this industry is we have relied on tax credits for so long that when we negotiate equipment purchases, construction contracts and financing, we have gotten fat. A solar panel selling in Spain for 8¢ a watt is selling for 24¢ here in America. It does not make sense.

There is a lot of fat in the system that we need to wring out of it. If we were smart as an industry, we would put the tax credits in our back pockets and negotiate as if we do not have them.

MR. SMITH: I don't know about fat in the system, but I agree. Ultimately the industry will have to adjust. If there is a time that the industry can thrive without tax credits, it is now with high demand and rising prices for electricity.

MR. MARTIN: Himanshu said capital is drying up for projects that are not ready to start construction this year. Are you seeing a pullback of capital sources?

MR. SMITH: We are not. Fortunately, we have three very strong investors who have put in patient capital. We are seeing a lot more due diligence on some issues, such as tax credits and permitting activities. We are seeing tax credit insurance premiums going up a bit. However, as far as access to capital, we really do not see a pullback.

FEOC

MR. MARTIN: Sandhya Ganapathy, how big an impediment are the FEOC rules that limit the amount of Chinese equipment and intellectual property that can be used in projects?

MS. GANAPATHY: It depends on the technology. We started focusing on a domestic supply chain for solar equipment a few years back, so FEOC is less of an issue for us on solar. Batteries are another story. The unfortunate thing is the FEOC rules took effect on January 1, and we still do not have guidance from Treasury about how to interpret them. We are all investing capital and making decisions without the benefit of any clear rules.

The key then is the risk allocation among the different stakeholders. How much of a risk do we take?  How much of a risk do the offtaker and the equipment suppliers take?  We are all working in a vacuum.

The rationale for FEOC is to force development of a domestic supply chain. That's brilliant, but it cannot happen overnight. The answer to your question is FEOC is an impediment, particularly for development of more battery energy storage projects that are badly needed to help with grid congestion.

MR. MARTIN: Andy Redinger, there are two types of tax credits currently on offer in the market: legacy tax credits that are not affected by FEOC and technology-neutral tax credits that are affected. The first projects with technology-neutral tax credits started to come to market late last year. Are you seeing any challenges financing such projects?

MR. REDINGER: No. The markets are as healthy and as open as I have ever seen. The bank market is completely wide open. The debt capital markets are as open as they have ever been as well.

Data Centers

MR. MARTIN: Kevin Smith, electricity demand, according to Bank of America, is expected to increase at a compound annual rate of 2.5% between now and 2035. That is a huge increase. How is that affecting how you do business? Is it changing your strategy?

MR. SMITH: Our investors start seeing dollar signs thinking that prices will go well above $100 a megawatt hour. We haven't seen that yet, but it is driving return expectations.

An earlier panel talked about a 100 basis point increase in expected returns.  We expect returns to increase by more than 100 basis points. We are already looking at projects with returns that are substantially above 100 basis points compared to a couple years ago.

The administration keeps saying not to worry because inflation and electricity prices are falling. There is nothing that I see that will drive electricity prices down in the future.

MR. MARTIN: Sandhya Ganapathy, what special issues are you seeing when dealing with data centers?

MS. GANAPATHY: We are seeing a huge amount of demand. We are seeing contracts signed. We are receiving inquiries, which was not the case a few years back. Going back to Kevin's comments about around 2.5% annual compound growth in electricity demand, we can all debate whether demand will grow at 1.5% or 3% or 4%, but there is growth. We are emerging from an era of little load growth.

The key is to have the right projects. You cannot have a conversation with data centers in a vacuum. They want projects that can supply power in the next 12, 18 to 24 months. We expect the heightened demand to last for more than the next 24 months, so it pays to keep advancing projects in the development pipeline.

With data centers, you need to have the right pipeline and the ability to deliver power ASAP.

New Bets

MR. MARTIN: Himanshu Saxena, you are not limited to investing in renewables. You invest across the sector. Where will you be placing new bets this year?

MR. SAXENA: We have a pretty wide portfolio of assets. For example, we own a number of thermal power plants. We just acquired a gas-fired power plant in Long Island that supplies about 26% of the power needs of Long Island. As the market shifted away from conventional assets in the last 10 years, we never really did that. We were not picking one side of this debate or winners or losers. Our portfolio is mixed between conventional and renewable assets.

We signed our first agreement with a hyperscaler 10 years ago. We have agreements today with most of the top tech companies. We signed a deal with General Motors back in the day. As early as five years ago, corporate customers were buying power from renewable power plants even if those plants were hundreds of miles away from the actual load. What was clear was that corporate electricity purchasers were trying to balance their carbon footprints across their entire power demand.

We have seen a change in the last 12 to 24 months where customers are signing contracts because they actually need the power.

The tech companies are to a certain degree indifferent between contracting with gas-fired power plants and renewables. To Sandhya's point, if the project is able to deliver power starting within the next two years, they will sign a contract with you. It does not matter whether the electricity is from a nuclear plant, a gas plant or a renewables plant. We have heard that data center owners are now starting to talk about buying power from coal-fired power plants as well.

We are back to saying energy addition instead of energy transition. Gas has become mainstream again.

We saw that in the last 12 months in the stock prices for Vistra and independent power producers. The IPP stocks are at all-time high. The renewables stocks are effectively trading at lows.

Our strategy remains the same. We will invest in projects and companies that we like, regardless of whether they are gas-fired power plants or renewable power plants.

We believe that during 2026 and 2027, customers will be focusing on  the reliability of power, which is something that renewables have a hard time providing.

How should a renewables company compete?  It cannot do a behind-the-meter deal with a data center using renewables. That doesn't happen. It has to build a portfolio of solar-plus-storage projects to power data centers. Renewables projects need to be grid connected to have another outlet for their electricity.

Reliability is a problem. Natural gas plants do not have the same intermittency issues. As an industry, we have to press on all cylinders. Renewables have to be built because they are ready to be built. Gas-fired power plants are also needed.

We see close to 130,000 megawatts of gas-fired power plants that are currently in development across the country. That is where we will see a lot of action during 2026 and 2027. People are going to start taking old gas-fired power plants and refurbish them to turn them into brand-new gas plants. The story over the next five years will be construction of both renewables and gas-fired power plants.

MR. SMITH: There is a huge difference between existing gas-fired generation and new gas-fired generation. Tens of gigawatts of new natural gas-fired projects are a long way away, and electricity prices have to rise to the $100 to $120 range at a minimum to support them.

We have all heard about the long wait times to take delivery of new gas turbines. There are permitting issues as well. Our gas pipeline system is packed. Getting gas capacity off the pipelines is a challenge. I developed a lot of natural gas projects in the first half of my career when renewables didn't exist. There is another whole level of community opposition to gas. It is not just the same crowd that complains about renewables, but gas also brings out people who are worried about pollution, noise and water issues. A 400-MW to 500-MW combined-cycle gas-fired power plant requires billions of gallons of water a year for cooling. In the short term, we will see more repowerings than new construction. Some gas-fired power plants will change hands.

It is not so simple to say we are going to build a lot of new natural gas plants.

Other New Trends

MR. MARTIN: I have two more questions. Brief answers, please. Andy Redinger, what new financing strategies are the investment bankers pitching to project developers?

MR. REDINGER: I think you will see more large-scale sale-leasebacks getting done this year. The structure is hard to beat from an IRR perspective. A couple have already been done. We are working on several. The sale-leaseback is poised to make a pretty big comeback in the power space.

MR. MARTIN: Last question. I am going to start with you, Andy, and then work across to Sandhya. This panel is about new trends. Are there any new trends that we have not mentioned?

MR. REDINGER: Himanshu touched on one. Independent power companies are trading anywhere from mid-teens as a multiple of EBITDA to well above 20. I think the equity markets are right to price them in that range.

Trading at these multiple is going to drive a lot of consolidation in the power space.

MR. SMITH: The biggest trend this year will be rising electricity prices. The question is what will supply the additional power. The natural gas industry has been waiting in the wings. We hear a lot of discussion about nuclear. My view is nuclear electricity costs double or triple what electricity costs from a solar-plus-storage project. We are going to see lots of repowerings.

MR. SAXENA: Amazon is buying a big solar-plus-storage project in Washington from Pine Gate. Google announced it is buying Intersect in a $4 billion transaction. Meta has asked for a federal license to trade power. Meta has signed something like 50,000 megawatts of power purchase agreements.

The tech companies are becoming power traders and asset owners. They are a new entrant. Historically, we viewed them as potential purchasers of renewable power because they had corporate ESG objectives.

These people are now coming into the market saying, "This is a commodity that is essential to my business and therefore I am going to try to control it."

They are going into the business of owning and operating power plants, whether it is conventional or renewables, and trading power. The tech companies could be as big as the Chevrons and Shells of the world if they get into power trading.

MS. GANAPATHY: Some of the corporate electricity purchasers are sophisticated enough also to be able to do their own generation and manage positions.

I think over the next few years, we will see a lot more hybridization. It will no longer be a single technology supplying power from a single location. We see this shift already in Europe, but the US has been slow to embrace it. Combining wind and solar with batteries opens opportunity to offer firm power.

It will be a new world where suppliers will offer single pricing for electricity from a mix of technologies.