President-elect Trump’s victory has delivered some bad news for climate-friendly energy, but experts say they don’t expect the renewables sector to falter in the long term.
Trump has railed against certain renewable technologies, particularly wind energy. He has vowed to repeal regulations that could speed up renewable adoption. And, with Republicans securing control in the House and Senate, the party may try to claw back some tax credits and other incentives for low-carbon power.
The build-out of renewable energy is one key way in which the U.S. can reduce its planet-warming emissions. It’s also an industry that provides millions of jobs.
In the immediate aftermath of Trump’s win, renewable energy stocks fell. Utility Duke Energy said it would reconsider its plans to shift away from coal. Chinese manufacturer Trina Solar also said it would sell its Texas factory, though it said the decision had “nothing to do” with Trump’s win.
Despite these signs, analysts told The Hill they don’t expect the renewable sector to wane significantly after the momentum it achieved under the Biden administration.
“The focus from the federal government and the executive branch on putting the U.S. on a net-zero trajectory — that's not the direction of policy in the next White House. However, this election does not mean that the momentum for low-carbon energy is over,” said David Brown, director of data firm Wood Mackenzie’s energy transition practice.
“In the next few years, there isn't too much that the president-elect can do to slow down projects,” Brown said.
“There's a robust pipeline of projects in the next few years. If you look at offshore wind, for example, there's clarity on the next five to 10 years on how much capacity has been permitted,” he added.
Brown pointed to the billions of dollars worth of tax credits passed in 2022 as part of the Democrats’ climate, tax and health care bill that spurred additional billions of private investments in renewables.
“Zero-carbon energy sources of electricity, particularly wind and solar, are economic, and we think they'll grow even in a slower low-carbon scenario,” he said.
Whether those tax credits will remain in place and for how long is an open question.
The office of House Speaker Mike Johnson (R-La.), in a plan released over the summer for Trump’s first 100 days, called for the repeal of "wasteful Green New Deal tax credits.”
And even moderate GOP lawmakers are indicating some of the credits could be on the chopping block.
Analysts say this would hurt the build-out of renewables, but it wouldn’t completely wipe out their potential growth.
“The sector will ultimately be okay,” said Meredith Annex, head of clean power analysis at BloombergNEF.
She added that if the tax credits are repealed, she expects the impact to be seen less in how much renewable power is ultimately built than in a slowing of “the pace of development and the pace of acceleration for climate mitigation.”
Bloomberg policy associate Derrick Flakoll said the firm projects that if tax credits are repealed for projects beginning construction in 2026 or later, that would cause a 17 percent drop in collective build-out for wind, solar and battery storage.
But, even under that scenario, “we do see annual build rates return to 2024 levels before the end of the decade,” Annex said. “That's driven by the economics of renewables relative to gas-fired power generation, and the strong demand that we're still seeing from utility and corporate offtake agreements.”
However, Kevin Rennert, federal climate policy initiative director at climate think tank Resources for the Future, said in the short term, uncertainty as to what policy will look like in the years ahead can create challenges.
“There's no question that this uncertainty is cutting against deploying greater amounts of clean energy,” he said.
David Miller, managing partner at Clean Energy Ventures, said the question in his mind is not whether there will be low-carbon power, but whether it will be led by U.S. companies.
“My largest overall concern is U.S. economic leadership going forward,” said Miller, whose company invests in climate tech startups. “This is an imperative for the entire world, and that that sector is going to become the most important economic sector in the world, and the question is whether the U.S. is going to continue to lead or give up that leadership to China.”
Asked whether he’d be more likely to invest in companies based outside the U.S. as a result of the election, he said, “if Europe has more favorable policies to support the startup of these companies, then that certainly will be a factor.”
