The fears of many clean energy advocates, policymakers, and environmentalists were realized in the early hours of Wednesday morning, as it became apparent Donald Trump would be declared the winner of the United States Presidential Election.
In pursuit of lofty climate initiatives, the renewable energy industry has benefited from a “manufacturing renaissance” under the Biden administration, but proponents have often wondered what might happen in the event of a second Trump presidency. Now, in light of polls demonstrating a dramatic shift to the political right across a vast swath of formerly blue constituencies that may lead to Republicans snatching a trifecta- the presidency plus control of the House of Representatives and the Senate- another question is emerging.
How far will Trump go?
Tim Urban leads the Bracewell tax policy practice out of the law firm’s Washington, D.C.-based Policy Resolution Group (PRG). He expects the next Trump administration will come in with a two-fisted mandate to do things consistently with what they believe to be the will of the electorate- their way.
“If not everything, then a lot of the internal revenue code is on the table to be renegotiated in the 2025 tax bill,” Urban asserts. “I’m still optimistic that much if not all of the IRA (Inflation Reduction Act) may be salvageable, but I think there’s a lot of work to be done.”
Urban suggests trade associations get involved immediately, lobbying for the important provisions of the landmark legislation proving to benefit communities across the country, particularly in red states.
“They have to go into the powers that be and make their case,” he recommends. “I don’t think it’s a case of sitting back and waiting for things to happen.”
Some industry leaders and advocacy groups are already taking up the charge of reminding Trump and his circle of how critical renewable energy is to “making America great again,” to steal a turn of phrase.
“Election results aside, the need for domestic energy has never been clearer. American industries need it for the unprecedented demand of AI and surging US manufacturing,” observed often outspoken Sheldon Kimber, founder and CEO of Intersect Power. “One of the fastest and most cost-effective ways to supply this is through the massive amount of shovel-ready American-made wind, solar, and battery assets. Our nation needs to build these new resources as an engine of economic growth, a source of energy security, and a critical area of global technological advantage. I’m positive that whatever policy changes may be coming the clean energy industry will do our part for American energy dominance by continuing to put steel in the ground at a record pace across our country.”
“State leaders understand that advanced energy is a dynamo, creating jobs and lowering bills for millions of Americans,” noted Advanced Energy United president and CEO Heather O’Neill. “Continued investment in advanced energy technologies – everything from large-scale wind and solar and storage, to electric transportation, to distributed and grid-edge solutions – will be great for our economy, for meeting rising energy needs, and for lowering household energy costs.”
The IRA and everything after
Leading up to the election, Trump insisted the IRA was too expensive and promised to rescind all unspent funds allocated by the law- prompting the Biden administration to speed up to ensure it spends the majority of available grant funding left. Since parts of the IRA have not yet been fully implemented and it’s not clear which direction some of Trump’s incoming staff will be compelled to go in specific cases, its fate in totality remains murky.
“There’s an element of the revenge tour that’s probably inevitable here,” surveys Liam Donovan, a senior political strategist for Bracewell. “It’s not just about what Donald Trump wants to do, but what the people around him want to do. What’s their agenda and what do they intend to do?”
Benjamin Storrow, who covers energy transitions for E&E News by Politico, called Trump’s victory a “gut punch” for U.S. climate action. He, too, wonders how Republicans will interpret their mandate in light of convincing results in their favor.
“I think there are contrasting views on what parts of the IRA to keep,” Storrow offered, harkening to a notable letter signed by 18 Republican members of Congress adamantly supporting the Biden admin’s trademark infrastructure bill. “That letter was a strong signal, but we haven’t had a lot of conversations about the specifics… It’s one thing to say you’re against the repeal of the IRA, but what parts of it? What are we talking about exactly? My expectation is that there will be some push and pull on both sides of the Republican party.”
Scott Segal, the head of Bracewell’s PRG, also thinks the IRA will remain largely intact but anticipates the next Trump administration to have an aggressive approach to fossil fuel expansion, including a spate of executive orders permitting drilling on federal land, expanding offshore drilling, and reducing environmental reviews and oversight across the board. Segal also notes Trump may attempt to withdraw the U.S. from the underlying framework of the Paris Agreement on global climate change, in addition to rolling back Environmental Protection Act clean air regulations domestically.
No matter what else happens, tariffs can be expected to remain a staple of the next administration, particularly on Chinese products.
“Going after China is one of the few truly bipartisan issues that we’ve had over the last few years,” notices Josh Zive, another member of Bracewell’s PRG.
“There is no question that tariffs were on the ballot and that trade policy was arguably the most important part of the Trump campaign’s economic mission, and as a result, the election results of last night are going to be seen as an unequivocal message on issues like tariffs,” he adds. “And what I think that promises is, over the coming weeks and months, we are going to see a flurry of different proposals from different Republican groups, members of Congress, in addition to the incoming administration, for what they’d like to do with what is a massively open playing field of different tools that you can use when it comes to international trade.”
Zive doesn’t anticipate much deviation in Chinese trade policy between Trump’s first and second terms. Instead, he foresees further implementation of Section 301-type actions, sweeping tariffs on products across sectors that target China in the short term in addition to long-term structural efforts. That could be a boon for domestic solar manufacturers who currently cannot compete with prices out of Southeast Asia.
“President Trump’s trade actions during his first term resulted in significant relief for solar manufacturers,” asserted Mike Carr, executive director of the Solar Energy Manufacturers for America (SEMA) Coalition, who says he looks forward to working with the Trump administration to ensure continued momentum reshoring the solar industry. “Smart trade and tax policy can shield thousands of American manufacturing workers from the relentless onslaught of state-backed Chinese firms’ anticompetitive business practices. With solar as the cheapest form of energy on the grid, we look forward to continuing to bring back American manufacturing and reduce our reliance on Chinese-controlled supply chains.”
Like his colleague Tim Urban, Bracewell’s Zive emphasizes the need for companies to get involved in the process as soon as possible to ensure their specific needs are addressed.
“These present opportunities for interested parties to be involved in the creation of the tariffs, and all of those details could make a life or death difference for specific companies or industry sectors as those tariffs get implemented,” he said.
Red Wednesday for green stocks, death to offshore wind?
For those who invest in renewable energy, it was a bloody morning on Wall Street. Canaries littered the coal mine: Sunnova Energy was down as much as 48%, First Solar plummeted almost 20%, and Sunrun was down nearly 30% at one point.
Trump has previously promised to “dismantle” the IRA and has been a particularly outspoken opponent of offshore wind, parroting false claims that they drive whales “crazy” and lead to their deaths, among other invented items. In May, Trump said he would scrap offshore wind projects on “day one” and it’s likely he will enact a moratorium on new offshore wind lease sales.
That context wasn’t lost on investors, who pushed down shares of Danish wind giants Orsted and Vestas double digits Wednesday.
“I think investors stand a risk of being whipsawed to some degree,” admits Bracewell PRG’s Urban. “Not having the comfort they need to invest millions in new clean energy facilities.”
“Anybody in this space would be well advised to be well counseled and have expert assistance,” he added shrewdly.
Despite ambitious goals propped up by the Biden administration, the U.S. offshore wind industry has been buffeted by supply chain issues, regulatory woes, and increased costs. Recent offshore wind sales have highlighted the uncertainty associated with investing in such endeavors, leading some formerly ardent supporters like Eversource Energy to pull out of the biz entirely.
“It’s certainly been a bumpy road with just a high number of cancelations,” admits Ben King, associate director at independent researcher Rhodium Group. “Maybe there’s more policy support from a loan programs office or something like that that could help this nascent industry sort of get off the ground, but yeah, it’s a thorny issue for sure.”
It will be thornier still, if not completely dead in the water, in a second Trump term.
Bracewell’s Segal notes one hallmark of the first Trump administration was not picking winners or losers on types of energy. That could theoretically be applied to accelerating nuclear development, but it more likely practically applies to fossil fuels. A more democratic approach to energy generation sources can be expected, to put it nicely.
“Renewables weren’t forced on a particular group if they didn’t want renewable power,” Segal recalled of Trump’s former policies. “The hallmark I’d expect is to allow communities to make choices that fit that state or local community.”
Illinois Congresswoman Nikki Budzinski won her election but called it “a sobering morning” for Democrats. She supports an “all of the above” approach to energy.
“I want to get us to full decarbonization and a clean energy economy, but it’s a recognition that this will take time,” she acknowledges. Budzinzki says she represents several old coal communities in her district, and spending time with them has been very informative of how she looks at energy issues.
“Top of mind for me is permitting form,” she adds, noting it is an issue with bipartisan support. “We need to be building more, faster, and all of the above to meet our energy needs.”
Budzinski also hopes for clarification on the 45C fuels production tax credit in the IRA as soon as possible, calling it a “win-win” in the midwest, home to lots of corn and soybean farming.
“The uncertainty is what is killing us. We need that guidance sooner rather than later,” she insists, hoping if Biden doesn’t do it on the way out, the next administration will be quick to see it through. “There are a lot of low-hanging fruits in the biofuel space that could be picked by the next administration.”
Uncertainty feels like the theme of a collective Election Day hangover, as millions of Americans wait to see how Trump chooses to wield power in his return to the Oval Office. It might not be the flashy decisions that make the biggest impacts, E&E News by Politico‘s Storrow warns.
“Who is he going to appoint to FERC? Those are huge- some of the nuts and bolts- not big sexy political headlines but hugely important on how this all shakes out,” he says.
In the meantime, the Solar Energy Industries Association (SEIA) and clean energy advocates nationwide are extending an olive branch and gearing up for the next round of challenges.
“SEIA looks forward to working with the new administration and members of Congress to build on the progress of the last four years. Together we can secure a future of clean energy abundance and prosperity,” said SEIA president and CEO Abigail Ross Hopper.
“Domestic solar manufacturing has grown four-fold under pro-business federal clean energy policies,” she notes. “Nearly nine in 10 Americans support these policies, which are uplifting communities in states like Ohio, Texas, Georgia, and South Carolina with thousands of jobs and billions of dollars of investments.”
No matter what you think of the results, the sun is probably going to come up tomorrow. As veterans of the solar industry will tell you, that’s a good thing.
