With a Republican White House, Senate, and the House of Representatives up for grabs, core solar industrial policy will possibly be repealed.
Republicans have secured political victories, electing President Donald Trump, securing the Senate, and possibly gaining majority in the House of Representatives.
While the DOW Jones industrial average rose 3% to record highs in the trading session following election day, solar and clean energy stocks have crashed heavily.
At the time of writing, the Invesco Solar ETF (TAN) has fallen 11%, major U.S. manufacturer First Solar is down 12%, inverter manufacturers Enphase and SolarEdge are down roughly 19%, residential solar installer Sunrun is down 26% and its competitor Sunnova has crashed over 40%. Utility-scale solar tracker manufacturer Nextracker has fallen about 6.5%, while its competitor Array Technologies has dropped nearly 20%.
Stocks have fallen in response to the possibility of repeal of the Inflation Reduction Act of 2022, including core elements of the policy like the 30% Investment Tax Credit.
While analysts have argued that IRA is unlikely to be entirely overturned, as it has created jobs and investment primarily in red states, the Trump administration has voiced opposition for the industrial policy.
The Trump administration said it would “terminate Kamala Harris’s green new scam and rescind all of the unspent funds.”
The disproportionate investment of the IRA in historically Republican states is likely to influence elected conservatives to fight to sustain core elements of the policy and its clean energy incentives. However, the Trump administration may opt for a “surgical” approach, cutting key funding to battery and electric vehicle manufacturing, offshore wind, and other emissions-free technologies.
Another core clean energy policy under threat is the Department of Energy’s Loans Program Office (LPO), which this year had over $130 billion of available loan authority dedicated to clean energy technologies.
Many clean energy businesses have relied on DOE LPO support. Sunnova’s Project Hestia, a low-income residential solar program, received a $3 billion partial loan guarantee, for example.
Project 2025, a document created by the Heritage Foundation that has been a guiding playbook for the Trump administration has plans to “sunset DOE’s loan authority through Congress and eventually eliminate the Loan Programs Office.”
Across party lines, it is clear that U.S. voters support solar and clean energy manufacturing. Nearly 9 in 10 (87%) of polled U.S. voters support federal clean energy tax credits in the Inflation Reduction Act, including 78% of Trump voters.
Despite the market-wide crash today, solar industry leaders have remained optimistic that the technological and cost advantages of solar and energy storage will continue to support the energy transition.
“The march toward renewable clean energy is both inevitable and the right thing to do. It will happen regardless of who is in the White House or Congress. It may slow down or speed up, but it will continue,” said JD Dillon, chief marketing officer of solar component manufacturer Tigo Energy.
In the first half of 2024, solar represented 67% of all new electricity-generating capacity added to the U.S. grid in the first half of 2024. Well over $100 billion of investment has been announced in clean energy manufacturing, a vast majority of which has been in Republican congressional districts.
E2 reports that $106 billion in clean energy manufacturing investment has been announced in Republican districts, leading to an estimated 73,515 jobs. This dwarfs the $18 billion announced in Democrat congressional districts, creating just under 30,000 jobs. Despite the anti-clean energy investment sentiments expressed by the Trump administration, Republican Congressional members may fight to retain IRA policies in their districts to sustain jobs and investment.
“Domestic solar manufacturing has grown four-fold under pro-business federal clean energy policies, and soon, we will have enough American-made solar panels to meet our demand for solar deployment,” said Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association (SEIA), in a statement released after Trump’s win. “Nearly 9 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.”
