The potential re-election of Donald Trump in November 2024 is often seen as a threat to the US clean energy revolution, says Rahul Bhushan, managing director of ARK Invest Europe.

However, there are several reasons why the impact might not be as severe as some fear.

1. Unlikely Repeal of the IRA: While Trump has pledged to dismantle the Inflation Reduction Act (IRA), achieving this would be highly challenging. The IRA represents the largest environmentally focused investment policy in U.S. history, with an estimated $380bn allocated to clean energy projects, individual clean energy incentives, EVs, sustainable fuels, conservation, building efficiency and electrification.

Many tax credits and subsidies under the IRA are popular, particularly in red states, due to their job creation and economic growth impacts. These provisions support renewable energy projects, critical mineral processing and battery manufacturing, all of which are critical to local economies. For instance, the IRA is expected to create over 80,000 jobs and generate $98bn in investment across 142 announced projects. Additionally, funds have already been allocated to various projects, making it difficult to claw back these investments.

Repealing the IRA would require Republicans to control the presidency, Senate and House, a challenging feat given the current political landscape and the diverse interests within the Republican Party, as well as the significant investments and job creation the IRA has already created.

Moreover, the act strengthened Investment Tax Credits and Production Tax Credits, which apply to various environmental and climate-focused projects, including solar, wind, geothermal and tidal energy. The uncapped nature of the bill means it could generate even higher levels of energy and climate spending if the demand exists.

2. Positive Impact of Tariffs on US Energy Transition Stocks: Trump’s inclination towards tariffs, particularly on Chinese imports, could inadvertently benefit US green energy stocks. By imposing tariffs on Chinese solar panels and related components, domestic manufacturers may find a more favourable market environment, potentially boosting their stock performance.

Tariffs on Chinese imports, including solar panels, lithium-ion batteries and EV components, create a protective market for U.S. manufacturers. The Trump administration initially imposed 30% tariffs on solar panels, which Biden later extended with some exemptions. These tariffs aim to counteract the competitive pricing of heavily subsidised Chinese products, which flood the global market at low costs.

Companies like First Solar (FSLR) have benefited from these tariffs as they mitigate the price advantage of Chinese imports, potentially boosting domestic production and sales. Other companies such as SunPower Corporation (SPWR) and Enphase Energy (ENPH) could also see positive impacts as the tariffs help level the playing field. Additionally, domestic EV battery producers like QuantumScape (QS) could benefit from reduced competition with Chinese manufacturers.

The continuation and potential increase in tariffs can lead to more domestic manufacturing jobs and investment.

3. Historical Performance of Fossil Fuel and Green Stocks: Historically, fossil fuel companies have performed better under Democratic administrations, while green energy stocks fare better under Republicans. This trend can be attributed to the differing policy approaches of each party towards energy and environmental regulation.

• Fossil Fuel Companies Under Democratic Administrations: Democratic policies often focus on restricting fossil fuel activities to address environmental and climate concerns. These restrictions typically reduce the supply of fossil fuels, leading to higher prices. As a result, companies like ExxonMobil and Chevron benefit from increased revenues due to higher oil and gas prices.
• Green Energy Stocks Under Republican Administrations: Conversely, Republican administrations tend to ease regulations on fossil fuels, which can lead to lower prices due to increased supply. While this might seem disadvantageous for green energy companies at first glance, it provides an indirect boost. With fewer regulatory hurdles and potentially lower fossil fuel prices, green energy companies can position themselves as cost-effective and sustainable alternatives.

According to finance and energy commentator Doomberg, the current push towards green energy often overlooks the complexities and challenges associated with completely phasing out fossil fuels. Doomberg argues that a balanced approach, including the continued use of nuclear energy and strategic deployment of renewable energy sources, is crucial for a stable energy transition.

Stocks like First Solar (FSLR), Enphase Energy (ENPH) and SunPower Corporation (SPWR) have shown resilience and growth potential under tariff protections and favorable policies. Additionally, companies in the battery production sector, such as QuantumScape (QS) and Freyr Battery (FREY), could also benefit from reduced competition with Chinese manufacturers, making them attractive investments in the green energy space.

4. Subnational and Market Forces: Even if federal policies become less supportive of clean energy, state-level initiatives and market dynamics will continue to drive the transition. Many states have their own aggressive renewable energy targets and incentives.

Additionally, the economic viability of renewable energy is improving, driven by declining costs and technological advancements. These factors ensure continued growth in the sector regardless of federal policy shifts.

The costs of wind energy, solar PV technology, battery storage and Carbon and Capture Storage have fallen over the last few years - driving continued investment in renewable energy. Even for stakeholders who may not prioritise climate change, the economic benefits of renewable energy are compelling. Lower costs translate to lower electricity prices, making renewables an attractive option for both consumers and utilities.

Many US states have implemented their own renewable energy standards and incentives, independent of federal policies. For example, California aims to achieve 100% clean electricity by 2045 and New York has set a target of 70% renewable energy by 2030. These state-level policies ensure that progress continues regardless of federal policy changes.


While a second Trump term could pose challenges to the clean energy revolution, the repeal of major policies like the IRA is unlikely to be straightforward. Tariffs could benefit domestic green stocks and historical trends suggest green equities might perform well under a Republican administration. Combined with strong state-level initiatives and market forces, the clean energy transition is likely to continue its march forward.

By Rahul Bhushan, managing director of ARK Invest Europe