Green Financing Mechanisms to Support Clean Energy Projects in Light of US Legislative Shifts: A Comparative Study of the Period Before and After 2025

Abstract

This study examines how the 2025 U.S. legislative shift — from the broad-based stimulus of the Inflation Reduction Act (IRA, since 2022) to the sovereign-conditioned restriction of the One Big Beautiful Bill Act (OBBBA) — has affected the efficiency and sustainability of green finance mechanisms for clean energy. The research problem centers on the contradiction between record-high global clean energy investment and the "mechanism impairment" specifically afflicting U.S. green finance mechanisms, employing a policy-shock design to capture the immediate, short-term rather than cumulative impact. Using a descriptive-analytical, comparative method with content analysis, the study tests three hypotheses on international exceptionalism, the functional performance of financing mechanisms, and field-level project sustainability. Findings reject U.S. exceptionalism, situating it within a broader protectionist rollback trend ; confirm severe disruption in tax-credit transferability under Foreign Entity of Concern (FEOC) rules alongside weakened field-level project financing ; and identify resilient alternative pathways such as corporate power purchase agreements. Strategic recommendations target developers, investors, and investment banks, most notably a shift toward independent project-financing models and the repricing of geopolitical credit risk.