The Republican clean sweep of the US Presidential Elections brings back Donald Trump to the White House. With his return to the Oval Office, the concern in the US renewable energy industry is palpable, thanks to an earlier reported statement by the President-Elect to repeal the Inflation Reduction Act (IRA) when he comes to power.
For the unversed, under his 1.0 Presidential reign, Trump pulled the US out of the 2015 Paris Agreement on climate change. During his election campaign this year, Trump publicly expressed his dislike for solar and wind technologies, saying these take up too much physical space to install and make electricity more expensive (see Solar Energy News Snippets From RE+ 2024 Day 2).
Solar stocks go tumbling down
The uncertainty with Donald Trump 2.0 in the renewable energy industry is clearly visible as US media reports are rife about clean energy investors selling their stocks along the entire supply chain soon after the election results started coming out.
According to a CNBC report, ever since Trump’s victory became certain on November 6, 2024, solar panel manufacturer First Solar’s stocks fell about 10%, while residential solar company Sunrun’s stocks declined by more than 29%, and those of Sunnova by over 51%.
Solar inverter manufacturers Enphase Energy and SolarEdge also saw their stocks tumble by about 17% and 22%, respectively. Additionally, solar tracker manufacturer Nextracker lost about 6% and Array Technologies nearly 22% of its stock value.
Impact to the IRA
Ever since it was passed in August 2022, the IRA has been a key driver of solar energy manufacturing in the US with a long list of companies, local and international, announcing billions of investments in the country. The list includes European, Indian as well as Chinese manufacturers.
According to the US Solar Market Insight Q3 2024 report, the 2 years of the IRA have added 75 GW of new capacity to the grid while the country’s solar module manufacturing capacity exceeded 31 GW in September 2024 (see US Solar PV Installations Grew 9.4 GW During Q2 2024).
However, Aurora Energy Research’s study of Project 2025 had earlier said that the prospects of Trump repealing the IRA are remote, but his preference for coal power plants may reduce wind, solar and battery deployment by up to 25 GW by 2040. Under a more stringent administration, however, wind, solar and battery deployment may come down by more than 200 GW by 2040 (see ‘More Extreme’ Project 2025 Agenda May Impact 200 GW+ RE Deployment In US By 2040).
So, is there a lot to worry about?
The industry sentiment on this question is, not really; at least not so soon. According to the analysts, the repeal of the IRA is not likely on the horizon, even though it may see some major alterations.
Sell-side analysts at US investment bank ROTH MKM wrote in a comment on Nov. 6 that the incoming administration may accelerate the phase-out of the Investment Tax Credits (ITC)/Production Tax Credits (PTC). It may also scrutinize 45X Advanced Manufacturing Tax Credits. The general bipartisan view is that solar manufacturing needs to be rebuilt with the Trump government emphasizing tariffs and enforcement of the trade laws. The latter may move quickly to ensure that those entities related to Chinese companies do not benefit from US subsidies or tax breaks.
Chinese companies are probably quick to realize the challenges as leading Chinese solar PV manufacturer Trinasolar is selling its 5 GW solar module manufacturing plant in Texas to FREYR (see Amid ‘Geopolitical Risks’ Trinasolar Sells Off 5 GW US Solar Module Plant).
Overall, despite the Red Sweep, the government is likely to take a ‘scalpel rather than a sledgehammer’ to the IRA, according to the lawyers ROTH MKM spoke with.
One big reason for this is simply because a lot of investment into solar PV manufacturing and other renewable energy components has already flowed into Republican-ruled states. According to an earlier analysis by CNN, about $268 billion in total announced clean energy investments has gone to Republican-held districts, compared to some $77 billion going to Democratic districts.
In his previous administration, Trump imposed tariffs on imported solar components from China that survived the Biden administration, boosting the domestic PV manufacturing industry.
The Head of Global Solar at market research firm Wood Mackenzie Power & Renewables, Michelle Davis, penned a note on her LinkedIn account to highlight ‘significant downside risks’ for the US solar industry under the Trump administration.
According to Davis, one could see a modified version of the IRA, along with additional tariffs and trade actions impacting solar under Trump 2.0. Nonetheless, she stressed that solar energy’s growth as the primary technology of the energy transition, with its declining costs and technological improvements, is impacted much more than who occupies the White House.
Additionally, even though Trump was not in favor of electric vehicles (EVs), calling them too expensive and threatening to roll back incentives for their production, Tesla boss Elon Musk’s strong support during his campaign has likely softened his stance. Notably, Tesla is also invested in solar energy, including stationary storage and as of recently inverters as well, and Musk is a vocal proponent of solar energy powering EVs and homes.
Guess it remains to be seen how the US energy environment will eventually turn out under Trump 2.0, especially for the solar PV sector in an environment that will be more fossil-fuel friendly. However, conservative Texas has turned into the largest US solar market and is also home to many of the new manufacturing solar projects. And there are more Red states with notable solar activities, as mentioned earlier.
Reactions
Meanwhile, reactions to Trump’s election have started pouring in. The President and CEO of the US Solar Energy Industries Association (SEIA) Abigail Ross Hopper congratulated Donald Trump on his win and said the association will work closely together with the incoming administration for the continued growth of the solar and storage industry.
Prior to this official statement, before the election results were out, Hopper’s little note on her LinkedIn profile echoed the industry sentiment when she said, “These times may feel exceedingly exciting, uncertain, tenuous or positive for you. I wouldn’t presume to know. We are a diverse industry with diverse interests. But I can assure you. SEIA is ready and excited to continue to share the story of energy dominance and bipartisan support that we have been preaching for the past few years.”
The Executive Director of the international renewable energy policy network REN21, Rana Adib called the Trump victory as a ‘serious blow to global climate and renewable efforts.’ “Electing a climate denier to the office will derail a lot of the work done, as we saw in his last Presidency,” reads Adib’s LinkedIn note. She goes on to add that the energy transition is already well underway.
The US Director of the World Resources Institute, Dan Lashof issued a statement saying that the Trump Presidency will stall the country’s efforts to tackle the climate crisis and protect the environment. But the benefits of clean energy outweigh the risks as declared by the incoming President in his election speeches.
“Donald Trump heading back to the White House won’t be a death knell to the clean energy transition that has rapidly picked up pace these last four years. Both Republican-led and Democratic-led states are seeing the benefits of wind, solar, and battery manufacturing and deployment thanks to the billions of dollars of investments unleashed by the Bipartisan Infrastructure Law and the Inflation Reduction Act,” explained Lashof. “Governors and representatives in Congress on both sides of the aisle have come to recognize that clean energy is a huge moneymaker and a job creator. President Trump will face a bipartisan wall of opposition if he attempts to rip away clean energy incentives now.”
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