Donald Trump’s election victory led to a sell-off in solar and wind power stocks. Even as the broader market rose to record highs on Wednesday and stocks had their best day since 2022, investors were turned away from renewable energy as the U.S. picked a “drill, baby, drill” candidate. I ran away. But while many see President Trump as a disaster for clean energy, some analysts say the market is overreacting and that blue-chip stocks in the space could be picked up at bargain prices. I’m thinking.
One reason for this is that, although President Trump has criticized the environmental provisions of President Biden’s Inflation Control Act (IRA) as a “green new fraud,” it is unlikely that they will be repealed. That’s especially because the law, which included billions of dollars in subsidies for renewable energy, contributed to a clean energy boom in several red states, especially for wind and solar projects.
Jay Hatfield, CEO of Infrastructure Capital Advisors, said he believes the law will be amended, but existing providers don’t need to worry too much.
“Wind and solar power will develop wisely,” he told Mr. F.Ortune. “Is there a trigger for people to suddenly get excited about this?” Probably not, but it’s too cheap and too short. ”
He said the world needs more electricity than any single energy source can provide. This has been evident during the AI boom, when tech giants like Microsoft and Amazon have shown voracious demand for the electricity needed to fuel their data centers. Utility stocks have been in the spotlight for a long time.
Morningstar energy analyst Brett Castelli also said the post-election selloff created an opportunity.
“Structural drivers such as technological advances, falling costs, and state renewable energy policies will ensure that the energy transition continues regardless of which party is in the White House,” he wrote in his paper. said. Note Wednesday.
One of the companies Castelli mentioned was First Solar, whose stock fell 10% on Wednesday but traded relatively flat on Thursday. He said the Arizona-based solar panel maker could even benefit from some of President Trump’s protectionist trade policies.
Hatfield, on the other hand, is a fan of NextEra Energy, Florida’s largest renewable energy developer. The company’s shares fell 5% on Wednesday, but have remained relatively stable since then.
Some of Biden’s environmental policies are popular with Republicans
Not a single Republican voted in favor of Biden’s 2017 green energy bill, but several right-wing lawmakers supported some of its provisions. For example, a group of 18 House Republicans recently dispatched Speaker Mike Johnson. letter It warns that some of the bill’s incentives create jobs and encourage investment in the district.
“You have to use a scalpel, not a sledgehammer, because there are some provisions that are helpful across the board,” Johnson said recently.
Meanwhile, some of President Trump’s closest allies stand to benefit if many of the clean energy tax cuts remain in place. They include his son-in-law Jared Kushner and Cantor Fitzgerald CEO Howard Lutnick, co-chair of President Trump’s transition team, who are members of the IRA. owns or owns a significant amount of stock in a company in which it is a significant beneficiary. report from Reuters Found it.
“This isn’t liberals versus conservatives,” Hatfield said of the subsidies.
That said, the president-elect has been highly critical of offshore wind, a significant shift from the outlook of the first administration. Shares in Danish wind power giant Orsted, a frequent target of President Trump, plunged 14% on Wednesday, but have since recovered slightly.
Hatfield doesn’t believe in offshore wind, but he thinks it’s irrational to add or remove renewable energy based on a presidential election. The best evidence of that may be the performance of solar stocks under the Biden administration, he said.
After the 2020 Democratic victory, the Invesco Solar ETF (traded as TAN on the NYSE) soared more than 50% before he took office, according to S&P Global Market Intelligence. Since then, the fund’s stock price has fallen nearly 70%.
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