Department of Energy Struggles to Spend $97B Climate Funds as Staff Shortage Deepens

DOE’s Budget Surge Meets Staffing Crisis

The U.S. Department of Energy (DOE) faces a paradox: it has more money than it can spend. In fiscal year 2025, the agency disbursed just 2% of its total budgetary resources, according to a report released by the EFI Foundation, a nonprofit tracking energy innovation. This figure is a dramatic drop from the 38% of funds distributed in fiscal year 2024.

Staffing Shortages Cripple Spending Capacity

While political shifts in Washington contributed to the slowdown, the primary obstacle is a severe shortage of personnel. The Department of Government Efficiency’s efforts led to the departure of one in five DOE staff members. Additionally, Energy Secretary Chris Wright reorganized offices in a restructuring described as Kafkaesque, further complicating operations.

Federal agencies like DOE are responsible for allocating and obligating funds through contracts, grants, and loans. However, with fewer employees, each remaining worker is now responsible for an unprecedented volume of budgetary resources.

“DOE is facing its largest imbalance in its history.”
— Alex Kizer, Executive Vice President, EFI Foundation

Budget Per Employee Skyrockets

The imbalance is stark. In fiscal year 2017, DOE budgeted approximately $4.7 million per full-time employee. By the fiscal year 2026 budget request, that figure had surged to $35.7 million per worker—an eightfold increase.

Inflation Reduction Act and Infrastructure Bill Fuel Funding Surge

The spike in budget per employee is partly due to the $97 billion injected into DOE by the 2021 Infrastructure Investment and Jobs Act and the 2022 Inflation Reduction Act. These laws represented the largest U.S. investment in combating climate change in history.

Trump Administration’s Workforce Purge Accelerates Crisis

The funding surge proved short-lived. Upon President Trump’s return to office in 2024, his administration froze funds and initiated a purge of federal workers. Approximately 3,000 staffers (one in five) left DOE through the Deferred Resignation Program. Hundreds of projects were canceled, eliminating $23 billion in federal support.

The One Big Beautiful Bill Act, passed in summer 2024, rescinded about $1.8 billion from DOE’s coffers and sunsetted many tax credits early. However, much of the Inflation Reduction Act’s spending had already been disbursed or remained intact.

DOE’s Paradox: Record Funding, Record Shortfalls

DOE now finds itself in an unprecedented position: its budget remains historically high, but staffing levels have plummeted. Even before the Trump administration’s workforce reductions, DOE struggled to hire enough personnel to meet the Inflation Reduction Act’s funding deadlines. The Loan Programs Office, for example, faced criticism for its slow disbursement of hundreds of billions in loan authority.