The United States Government just passed sweeping legislation that will have a huge impact on the future of electricity and energy.

It will immediately alter our investment strategies from this point forward.

The legislation turns the United States away from renewable energy sources, battery storage, and instead favors coal. Let’s go through some details and then discuss the impacts on commodity markets.

Here are the significant impacts:

• Elimination of federal tax credits for wind and solar projects.
• Elimination of federal tax credits for residential solar and energy efficiency upgrades.
• Repeals or guts funding for clean energy, electric vehicles (EVs), energy efficiency, and pollution reduction projects.
• Elimination of tax credits for new and used EVs and home charging equipment.
• Elimination of incentives for energy-efficient appliances
• Repeal clean hydrogen production credit.

This will have huge implications for the U.S. energy industry going forward. In 2024, over 90% of the new power supply to the grid came from solar power.

These new restrictions will devastate investment in new electrical infrastructure. While it excludes coal, natural gas, and nuclear power, you can’t build them quickly. Unlike solar and wind, which go up quickly.

The result was that 70% of new U.S. power plants built in 2024 were wind, and solar.

Since 2022, companies invested about $321 billion in new energy projects. And they forecast to spend another $522 billion. But they won’t qualify for the existing tax breaks if they aren’t producing power by 2027.

Make no mistake, the tax incentives stimulated a lot of new energy investing, as you can see below:

Wind, solar, batteries, and electric vehicles are huge losers from this new legislation. Now we need to discuss the downstream impacts.

How Does the New Legislation Impact the Energy Future?

There are some immediate losers in this bill. The primary losers are U.S. mining companies. Because axing renewable energy from the electrical mix will reduce demand for battery metals, including copper.

According to Bloomberg, companies killed $15.5 billion in new factories and projects since January 2025. That eliminates about 12,000 new jobs

More importantly, the projects killed would produce electricity quickly. As opposed to the long lead time for nuclear, coal, and even natural gas projects. We simply can bring on new power fast enough to supply demand from artificial intelligence (AI).

There are rumors that Elon Musk plans to import an entire power plant to power the new Twitter AI. The implication here is that Musk doesn’t believe U.S. electric power growth can meet demand from AI.

We can predict two outcomes here – higher power prices and/or stymied AI growth. Remember, AI isn’t geographically constrained. In other words, data centers can go anywhere. If U.S. power becomes too expensive, AI investment will go where it’s cheaper.

That’s just a small sliver of the larger economic impact.

Uncertainty is the word of 2025. We don’t have a good read on interest rates – higher rates hurt commodity prices. The administration continues to hammer the federal reserve to lower rates. But you can’t bully interest rates.

The new legislation adds $3.5 trillion in debt, which means the Treasury must issue new bonds to finance that debt. When you add supply without demand, prices go down. With bonds, when the price goes down, the rate must go up (it’s economic math).

Usually, U.S. treasury bonds attract a global audience. For decades, we sold our debt to the world, because everyone knew that we were good for debts. Unfortunately, recent leadership eroded that faith. The appetite for U.S. debt is down…at a time when we need to sell a LOT more.

Rising interest rates already have a cooling affect on U.S. consumers. Here’s a list of impacts from last year:

You might say, “But the Market is at all time highs!” And you’d be correct. But don’t let the highs blind you to the volatility. In 2025, the market fell hard when the U.S. announced global tariffs.

We should take this into account for the rest of the year. High interest rates remain economic headwinds. The tariffs will continue to loom in the future. And the administration antagonized the buyers of debt at a time when they need to issue $3.4 trillion in new debt.

This creates a fraught investment environment right now. The U.S. market looks tenuous today. That means we need to take a more global approach to our investment thesis.

Precious metals remain a safe haven against U.S. economic issues. Silver recently hit an all-time high.

We discussed silver’s industrial side last month. Fortunately for us, it has a much more global role. It is a critical metal for solar systems. As we discussed earlier, solar was one of the most important sources of new electric power in the U.S. and around the world.

According to Solar Power Europe, global photovoltaic capacity will make up 30% of global electric generation by 2030. That’s 80% of all the new renewable energy capacity between now and 2030.

And the solar manufacturing industry consumes about 16% to 19% of silver demand. Analysts expect that to grow to 20% to 30% of global silver demand by 2030. Solar installations tripled silver demand over the past decade. In 2024, solar used about 232 ounces of silver.

So, even in the face of U.S. economic turmoil, we still like silver’s outlook for the future. Remember, silver miners spent the past five years selling silver for around $25 per ounce on average. Now they get around $35 per ounce. That’s a 40% increase in the price. And that should go directly to the bottom line for silver producers.

Adding ten dollars per ounce of silver to mining companies’ profit margins can forgive a lot of sins. Analysts project an 85% year-over-year growth in earnings for the major silver producers, which isn’t priced into the stocks yet.

That makes silver one of the few commodities that we feel confident will do well over the next six to twelve months.

So, we will reiterate our investment recommendation from last month.

Action to Take: Buy Sprott Silver Miners & Physical Silver ETF (Nasdaq: SLVR) at the market price. Use a 30% trailing stop on the position. That means if we buy at $30 per share, we would sell it if it closed below $21 per share.

In the meantime, we need to do a lot more work parsing the implications of the latest bill and the tariff wars that continue to plague our economy.

Make no mistake, we are in volatile market conditions. The S&P 500 could easily repeat its plunge that we saw in the spring.

For the Good,

The Mangrove Investor Team