Sign In or Create an Account.

By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy

Economy

Clean Energy Stocks Are Down — But Not Out — After Trump’s Win

The market picture is at least slightly more mixed than you might think.

Donald Trump.
Heatmap Illustration/Getty Images

While many investors and analysts had anticipated a Donald Trump victory Tuesday — Maheep Mandloi of Mizuho Securities wrote earlier this week that stocks had “priced in” a 70% chance of Trump winning — that hasn’t stopped markets from twitching reflexively now that he’s actually done it.

The clean energy industry, for its part, is already preparing to sell itself to a Republican Washington. The trade group Advanced Energy United’s president Heather O’Neill congratulated Trump in a statement and said it was “committed to working with the Trump-Vance Administration to meeting America’s energy challenges with advanced energy solutions.”

But the market isn’t convinced the gambit will pay off.

The first and most obvious effect of the decisive election result is that clean energy stocks are down. The iShares Global Clean Energy exchange traded fund, whose biggest holdings are the solar panel company First Solar and the Spanish utility and renewables developer Iberdola, was down about 7% in early trading versus yesterday. The iShares U.S. Energy ETF, meanwhile, whose largest holdings are Exxon and Chevron, is up over 3% compared to yesterday and just over 10% on the year.

Some specific publicly traded clean energy stocks have sunk so far today, especially residential solar companies like Sunrun, which was down over 25% in early trading. Sunrun competitor Sunnova was also down over 40%, while the inverter company Solaredge is down over 20%. Solar panel company First Solar, which some analysts think could be protected from a Trump revision of the Inflation Reduction Act due to its U.S. manufacturing presence, is still down over 12%.

“Manufacturing credits will likely stick,” Greg Brew, an analyst at Eurasia Group, told me. “Why touch a whole of bunch of jobs in red districts?”

That doesn’t mean manufacturing will be unaffected. This morning FREYR, a Norwegian battery companies, announced that it will acquire the U.S. assets of Trina Solar, a Chinese solar module manufacturing company. These include a plant in Texas that started production just last week, according to the announcement, indicating worry that a Trump administration could see more trade conflict with China and Chinese companies while also trying to boost domestic manufacturing, even in the renewables sector.

That renewables companies are falling more than fossil energy companies are rising, however, indicates that the market is not expecting a Trump White House to do much to improve oil and gas profitability or production, which has actually increased in the Biden years thanks to the spikes in energy prices following the Russian invasion of Ukraine and continued exploitation of America’s oil and gas resources through hydraulic fracturing. And while the Biden administration attempted to issue a formal pause on approvals of new export terminals for liquified natural gas, a federal judge blocked that move in July. In September, the Department of Energy approved exports for a terminal on the Mexican Gulf Coast using American gas.

“He’s going to come in and say ‘drill baby drill,’” Brew said of Trump. He will also likely increase leasing on federal land and toss the ban on new facilities for liquefied natural gas exports. But the overall effect may be limited. “I don’t think the Biden administration did anything to get in the way of exploration and production investment” for the fossil fuel sector, Brew said.

Cheniere Energy and Energy Transfer, two companies with existing or planned LNG terminals, did see their shares rise a touch in morning trading. Companies that operate oil refineries have also gotten a nice boost today. Phillips 66 and Valero shares are up 4.5% and 5%, respectively, as the market is anticipating an overhaul of Environmental Protection Agency mileage standards designed to accelerate the transition to electric vehicles. “Anything on mileage standards and/or EV credit reduction is likely positive for duration of refining as it pushes out the EV adoption curve,” the investment bank Jefferies wrote in a note to clients.

On the other hand, the wind energy industry has long been the target of specific ire from Trump and is taking a hit Wednesday. U.S.-traded shares of Vestas, the Danish turbine manufacturer, are down almost 15% and have hit their lowest point this year. GE Vernova, meanwhile, the GE energy spinoff that makes both wind turbines and the turbines that go into natural gas power plants (as well as electrical equipment) is up over 3%. Unlike pure-play green energy companies, GE Vernova is positioned to profit from any increase in electricity demand, whether served by renewables or fossil fuels.

And of course, there’s the most valuable green technology company in the world, one that manufactures electric vehicles and batteries (and robots). In early trading, Tesla stock is up over 13%, bringing it to its highest price per share — $285 — since September 2022.

Renewables companies are at risk from both changes in tax policy as well as the potential for Trump’s tax cut and spending plans to keep interest rates high. While the market is focused on the prospects of new legislation and regulation in Washington, renewables companies may be looking just as warily at the Federal Reserve, which will announce an interest rate decision on Thursday. The market expects the federal funds rate to fall another 0.25 percentage points, following the half-point mega-rate cut in September. What happens after that is anyone’s guess.

You’re out of free articles.

Subscribe today to experience Heatmap’s expert analysis 
of climate change, clean energy, and sustainability.
To continue reading
Create a free account or sign in to unlock more free articles.
or
Please enter an email address
By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy
Climate 101

Welcome to Climate 101

Your guide to the key technologies of the energy transition.

Welcome to Climate 101
Heatmap illustration/Getty images

Here at Heatmap, we write a lot about decarbonization — that is, the process of transitioning the global economy away from fossil fuels and toward long-term sustainable technologies for generating energy. What we don’t usually write about is what those technologies actually do. Sure, solar panels convert energy from the sun into electricity — but how, exactly? Why do wind turbines have to be that tall? What’s the difference between carbon capture, carbon offsets, and carbon removal, and why does it matter?

So today, we’re bringing you Climate 101, a primer on some of the key technologies of the energy transition. In this series, we’ll cover everything from what makes silicon a perfect material for solar panels (and computer chips), to what’s going on inside a lithium-ion battery, to the difference between advanced and enhanced geothermal.

There’s something here for everyone, whether you’re already an industry expert or merely climate curious. For instance, did you know that contemporary 17th century readers might have understood Don Quixote’s famous “tilting at windmills” to be an expression of NIMYBism? I sure didn’t! But I do now that I’ve read Jeva Lange’s 101 guide to wind energy.

That said, I’d like to extend an especial welcome to those who’ve come here feeling lost in the climate conversation and looking for a way to make sense of it. All of us at Heatmap have been there at some point or another, and we know how confusing — even scary — it can be. The constant drumbeat of news about heatwaves and floods and net-zero this and parts per million that is a lot to take in. We hope this information will help you start to see the bigger picture — because the sooner you do, the sooner you can join the transition, yourself.

Keep reading...Show less
Green
Climate 101

What Goes on Inside a Solar Panel?

The basics on the world’s fastest-growing source of renewable energy.

What Goes on Inside a Solar Panel?
Heatmap illustration/Getty Images

Solar power is already the backbone of the energy transition. But while the basic technology has been around for decades, in more recent years, installations have proceeded at a record pace. In the United States, solar capacity has grown at an average annual rate of 28% over the past decade. Over a longer timeline, the growth is even more extraordinary — from an stalled capacity base of under 1 gigawatt with virtually no utility-scale solar in 2010, to over 60 gigawatts of utility-scale solar in 2020, and almost 175 gigawatts today. Solar is the fastest-growing source of renewable energy in both the U.S. and the world.

Keep reading...Show less
Yellow
Climate 101

The Ins and Outs of Wind Energy

The country’s largest source of renewable energy has a long history.

The Ins and Outs of Wind Energy
Heatmap illustration/Getty Images

Was Don Quixote a NIMBY?

Keep reading...Show less
Green