The Keystone Research Center and ReImagine Appalachia are reporting that a recent fall in clean energy investments in Appalachia has dramatically impacted the region’s employment numbers and manufacturing output.
“The manufacturing investment boom that federal clean-energy and innovation policies sparked in 2022 has turned into a bust. Private construction spending in manufacturing has been in free fall for 20 months, and the nation has lost 277,000 manufacturing jobs since January 2024,” said Stephen Herzenberg, economist and executive director emeritus, Keystone Research Center
In early 2022, private construction spending in the United States was about $80 billion, and that more than tripled to $249 billion before November 2024, according to U.S. Census Bureau data. That increase was driven in part by federal policies that incentivized clean energy investments, like the Inflation Reduction Act (IRA). Those annual investments have reduced to $170 billion in June of this year.
“Getting private construction spending in manufacturing growing rapidly again is vital to manufacturing communities in coal-country Appalachia and across the United States — and to the regional and national economy, to limiting climate-related disasters, and to public health,” Herzenberg said.
ReImagine Appalachia analyzed state-level private construction data from the Rhodium/MIT Clean Investment Monitor, which monitors related federal incentives and investments. In this post-incentive era, Kentucky, Ohio, Pennsylvania and West Virginia, the states comprising Appalachia, clean energy deployment was 17% less than its peak in 2024, and clean energy manufacturing investments were 26% less than their peak investment period in Q4 2023.
In December, ReImagine Appalachia released a report claiming that 67% of the region’s nearly 93,000 clean energy jobs were at-risk under the Trump administration. The report found that clean energy investments in the region, which had peaked $4.7 billion in one year, had stagnated in 2025.
Appalachia is home to many “energy communities,” or communities that have relied on economic growth from fossil fuels, such as coal production. The IRA incentivized clean energy project of a certain scale, such a solar PV, to receive additional tax credits for deploying new systems in energy communities.
Despite the slowing cash investments, ReImagine Appalachia and Keystone Research Center reported that individual consumers in the region are spending more on clean energy and electric vehicles in 2026.
“There is real hope in this data. Consumer spending on clean energy and clean transportation kept rising in 2026 because renewables and batteries keep getting cheaper. But to rebuild manufacturing in coal-country Appalachia, we need a reversal in federal policy. Federal investment was a game changer, and it can be again,” said Diana Polson, Pittsburgh policy and research director at the Keystone Research Center.
News item from ReImagine Appalachia
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Facts Only
* Private construction spending in the U.S. was approximately $80 billion in early 2022 and reached $249 billion before November 2024.
* Federal policies, like the Inflation Reduction Act (IRA), incentivized clean energy investments.
* Annual clean energy investments reduced to $170 billion in June of this year.
* Private construction spending in manufacturing has been in a free fall for 20 months.
* The nation lost 277,000 manufacturing jobs since January 2024.
* In Kentucky, Ohio, Pennsylvania, and West Virginia, clean energy deployment was 17% less than its peak in 2024.
* Clean energy manufacturing investments were 26% less than their peak investment period in Q4 2023.
* ReImagine Appalachia claimed 67% of the region’s nearly 93,000 clean energy jobs were at-risk under the Trump administration.
* Regional clean energy investments, which peaked at $4.7 billion in one year, had stagnated in 2025.
* Individual consumers in the region are projected to spend more on clean energy and electric vehicles in 2026.
Executive Summary
Federal policies incentivizing clean energy investments, such as the Inflation Reduction Act (IRA), led to a significant increase in private construction spending in the U.S., which more than tripled from about $80 billion in early 2022 to $249 billion before November 2024. These investments reduced to $170 billion in June of this year. Economist Stephen Herzenberg noted that growing private construction spending in manufacturing is vital for regional and national economies, climate mitigation, and public health.
Analysis of state-level data from the Rhodium/MIT Clean Investment Monitor indicates that clean energy deployment in Kentucky, Ohio, Pennsylvania, and West Virginia was 17% less than its peak in 2024, and clean energy manufacturing investments were 26% less than their peak investment period in Q4 2023. ReImagine Appalachia reported that 67% of the region's nearly 93,000 clean energy jobs were at-risk under the Trump administration, and regional clean energy investments stagnated in 2025, despite individual consumer spending on clean energy and electric vehicles rising in 2026 due to falling renewable costs.
Full Take
The narrative presents a critical tension between large-scale federal policy incentives designed to drive transition and the resulting localized economic disruption in specific regions. The core pattern involves a displacement effect: broad, top-down investment policies create regional booms followed by contraction when those investments shift focus or decline under different political administrations. The contrast between soaring national spending and stagnation at the state level highlights how benefits of policy can be unevenly distributed among energy communities reliant on legacy industries like coal.
The presentation of data regarding job risk (67% at-risk) alongside consumer spending growth introduces a layered complexity. This suggests that while renewable technology adoption is gaining traction at the consumer level, the structural shifts in manufacturing and construction employment within specific regional economies are lagging or reversing, creating an impasse for transition communities. The call for a "reversal in federal policy" implies that the mechanism—federal investment—is recognized as a crucial lever, suggesting that the failure to secure continued supportive policies is the central constraint on local recovery, rather than a simple lack of consumer demand. This structure suggests an underlying critique of policy timing and distribution, where the pursuit of one set of goals (clean energy) has inadvertently undermined another (regional manufacturing employment).
Bridge questions: If private investment continues to decline regardless of federal incentives, what alternative localized economic strategies can effectively rebuild manufacturing bases in these energy communities? How should policymakers balance broad climate objectives with the immediate stabilization of employment in regions dependent on transitioning industries? What role do local governance structures play in reorienting regional investment flows when national policy frameworks shift?