Donald Trump’s election victory turned on solar and wind sell it Even the broader markets rallied the records On Wednesday, as stocks had their best day since 2022, investors fled America’s renewables”digger, baby, dig” candidate. But while many see Trump as the bane of clean energy, some analysts believe the market has overreacted, and quality stocks in the sector may be in for a bargain.
One reason is that while Trump has gutted President Biden’s environmental provisions Inflation Reduction Act (IRA) As the “Green New Scam”, it is unlikely to be repealed. That’s not least because the law, including billions in renewable subsidies, has helped make clean energy a reality. boom in several red situations, especially with regard to wind and solar projects.
Jay Hatfield, CEO of Infrastructure Capital Advisors, believes the act will change, but said existing providers should not worry.
“It will be a sensible development of wind and solar,” he told Fortune. “Is there a catalyst to get people excited all of a sudden? Probably not, but it’s too cheap and too short.’
The world, he said, simply needs more power than any single energy source can provide. This has been evident during the AI boom, which has fueled it utility stocks – Traditionally seen as a boring defense game, just like the tech giants Microsoft and Amazon exhibition frantic demand for the energy needed to power their data centers.
Morningstar energy analyst Brett Castelli also said the post-election sell-off has created opportunities.
“Structural drivers such as technological advances, falling costs and state renewable energy policies ensure that the energy transition will continue regardless of who is in the White House,” he wrote. notice Wednesday
A company that Castelli highlighted First Sunon Wednesday its shares fell 10% before trading relatively flat on Thursday. The Arizona-based solar panel maker, he said, could also benefit some of Trump’s protectionists trade policies.
Hatfield, on the other hand, is a Florida fan NextEra Energythe largest developer of renewable energy in the country. The company’s shares fell 5% on Wednesday, but have remained relatively steady since then.
Some parts of Biden’s green policy are familiar to Republicans
While not a single Republican voted for Biden’s 2017 green energy legislation, several right-wing lawmakers have warmed to some of its provisions. A group of 18 House Republicans, for example, has just sent Speaker Mike Johnson a letter noting that some of the incentives of the bill have created jobs and encouraged investments in their neighborhoods.
“You have to use a scalpel and not a hammer because there are some provisions in there that have helped overall,” Johnson said recently.
Some of Trump’s closest allies, on the other hand, will benefit if many of the clean energy tax breaks are retained. Among them are his son-in-law Jared Kushner and Cantor Fitzgerald CEO Howard Lutnick, the chairman of Trump’s transition team, who most recently run or hold large stakes in companies that are significant IRA beneficiaries. the report from Reuters find
“This is not liberals versus conservatives,” Hatfield said of the grants.
That said, the president-elect has been highly critical of offshore wind, a stark reversal of the predictions of his first administration. Shares of the Danish wind giant Orstedwhich has been entered over and over again Trump’s crossIt fell 14% on Wednesday, but has since recovered slightly.
Hatfield doesn’t believe in offshore wind, but thinks it’s irrational to pile up or phase out renewables based on a presidential election. The best evidence of that, he said, may be the performance of Biden’s solar stocks.
After the Democratic victory in 2020, Invesco’s solar ETF (traded on the NYSE as TAN) rose more than 50% before its inauguration, according to S&P Global Market Intelligence. Shares in the fund have fallen nearly 70% since then.
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