Could Clean Energy Thrive Despite Trump Policy Changes?

President-Elect Donald Trump has vowed to reduce federal support for clean power as soon as he takes office in January. Yet political realities may limit the extent to which incentives, such as those in the Inflation Reduction Act, may be rolled back, leaving open the possibility that the incoming president may seek surgical rather than sweeping cuts. 

A more fundamental question nevertheless remains: How much would reducing federal support for clean energy actually slow its growth in the U.S.? On the podcast, two experts on clean power markets and policy explore the likely scope and practical impacts of Trump’s stated energy positions.

Meredith Annex is an energy economist and Head of Clean Power at Bloomberg NEF. Derrick Flakoll is Bloomberg’s Policy Expert for the US and Canada. The two analyze the incoming administration’s plans for clean power manufacturing, project development, and trade policy. They also share their insights on how these policies might unfold and what they could mean for the future pace of clean power growth in the United States.

Full Transcript

Andy Stone: Welcome to the Energy Policy Now podcast from the Kleinman Center for Energy Policy at the University of Pennsylvania. I’m Andy Stone.

President-elect Donald Trump has vowed to reduce federal support for clean power as soon as he takes office in January. However, political realities may limit the extent to which incentives, such as those in the Inflation Reduction Act, may be rolled back, leaving open the possibility that the incoming president may seek surgical rather than sweeping cuts. But a more basic question remains. How much would reducing federal support for clean energy actually slow its growth in the US?

On today’s podcast, we’re going to explore the likely scope and practical impacts of Trump’s stated energy positions with two experts on clean power markets and policy. Meredith Annex is an energy economist and head of clean power at BloombergNEF. Derrick Flakoll is Bloomberg’s policy expert for the US and Canada. The two recently co-authored research analyzing the incoming administration’s plans for clean power manufacturing, project development and trade policy. In this episode, they’ll share their insights on how these policies might unfold and what they could mean for the future pace of clean power growth in the United States. Meredith and Derrick, welcome to the podcast.

Derrick Flakoll: Great to be on, Andy.

Meredith Annex: Thank you for having us.

Stone: So Meredith, can you start us out with an overview of the Clean Energy policy positions that have been communicated by the incoming Trump administration?

Annex: Overall, the US clean energy space is still in a really strong position. Just to show you how big this space has become, we’re expecting to see 45.5 gigawatts of solar installed this year. That’s in direct current terms. So in the EC it would be around 34 gigawatts. And for wind, about 7 gigawatts. These are not small sectors. This is a really, really big part of the global market. And there’s a lot of questions now around what this is going to look like when we are under a Trump administration. Obviously, we had a lot of new support that came in under the Biden administration. Most topical is going to be the Inflation Reduction Act, tax credits, which have really bolstered confidence and investment outcomes in the region.

Under Trump, we’re going to see how those evolve. We’ll probably be talking about this quite a lot during the conversation today. The sector that we see under the most pressure that would be offshore for wind, and with solar and wind, probably a bit more robust going forward.

Flakoll: And to go into a bit more detail about some of the power sector policy positions that Trump has been talking about— there’s a variety, but the key watch words are a refocus from sustainability to reliability and cost, and just sort of basic suspicion or even hostility to some of the Biden administration’s tougher regulations and incentives for clean energy. So let’s give an example. For the new EPA Administrator, Lee Zeldin, he’s said that some of his priorities include rolling back regulations and trying to ensure that the US is an AI superpower.

Now what does that mean? It means basically getting as much power on the grid that conserves that as quickly as possible. That would mean cutting regulations broadly. Probably the National Environmental Policy Act, which can slow down installations. But also moving away from the Biden administration’s attempts to sort of roll back existing coal power supply and new gas power supply, since that might be a little bit more reliable, to some points of view. Additionally, Trump has referred to Biden’s signature Inflation Reduction Act, which contains pretty rich production and investment tax credits for clean energy, as a “green new scam.” And he’s said that he would likely try to reverse a lot of those incentives.

On the trade front, there’s a lot of suggestion that Trump would impose very high tariffs, as high as 60 to 100% on Chinese imports, which can account for critical parts of the clean energy supply chain, and 10 to 20% on components from other parts of the world, including Canada and Mexico, which are taking increasingly large roles in US supply chains more generally. And so that kind of runs the gamut from the regulation side, the incentive side and the trade policy side. And there’s more besides we can get into later.

Stone: So going back a moment. Meredith, you had also mentioned, or started to mention, you know, kind of where the trajectory right now for clean energy development is in this country. The question I have regarding that is, how important have the Biden era policies, notably the Inflation Reduction Act, been to the level of development that we’ve seen in recent years?

Annex: What we’ve seen is a step change in investments into renewable energy since the Inflation Reduction Act took place. So if we took a look at the recent— we measure investments on a biannual basement. So first half of the year, second half of the year. The average investment since the Inflation Reduction Act passed has been about 50 billion into US wind and solar projects— since the Act was passed. That’s 63% higher than the average half annual investments that we saw over 2019, to 2022. So this is just a completely different market now, a huge step change in activity.

And the Inflation Reduction Act tax credits, there’s two elements of it that really matter. One is the stability and the size of these tax credits. The fact that you’ve got that certainty going out into the future. But the other is the tax credit transferability elements, which means that a greater number of participants are able to take part in this market than we ever saw before. Both of these things are really playing into it.

Even on the manufacturing side, which is another set of tax credits, the 45x tax credits, we’re seeing activity in the US now. If you look at solar module manufacturing, we’ve seen that ramp up. We’re now at about 28 gigawatts of new module capacity that has been added in the US for 2024. Still a long way to go on the more upstream parts of the solar value chain. So cells and wafers, for instance, there’s not nearly as much activity domestically in the US yet. But you can really see the change in these markets that has been happening since the policy was passed.

Stone: And what has the role of corporate agreements and utility requirements for clean energy been in all this? I guess the underlying question here is, how sensitive has that activity been to investments such as those in the IRA?

Annex: The US has always been a leader when it comes to corporate power purchase agreements. If you see the contract terms that are out there, they usually— the innovative ones get trialed in the US, then we start seeing them come abroad. Overall, we’re still seeing an immense amount of both corporate and utility offtake for renewable energy right now. On the corporate side— it’s a lot of different drivers to this, but it’s a combination, especially of large tech companies like your Googles, your Amazons, your Microsofts, especially now that data centers are really growing within the US. But it’s also been the localization of manufacturing in the US. So we’re seeing more and more of these industrial players starting to take on corporate power purchase agreements globally as well.

The other big factor, though, in the US, is not just these corporate offtakes. It’s also the utility offtakes. The integrated resource plans that we’re seeing. So if you take a look at, for instance, Duke Energy, they’re planning to acquire 29 gigawatts of renewables by 2035. That’s an immense market already just from one single utility in the US. And a lot of these are robust, even whatever happens with the Inflation Reduction Act tax credits.

Stone: So Derrick, Trump has signaled plans— as you indicated earlier in the conversations— signaled plans to roll back clean energy incentives. But it seems likely that he will target some areas more than others. What are the key incentives that are in question? And what political or economic calculations might influence how much each is rolled back?

Flakoll: Straying away from clean power a bit, the sector that seems most at risk is electric vehicles. We’ve seen some very clear signals from the Trump administration that they plan to repeal those. But closer to home, there seems to be a lot of focus on the clean power production and investment tax credits. Beginning in 2025 those are going to become tech neutral, but they’re still fundamentally the same layer cake of incentives that we’ve grown to know and love in the clean energy market since Biden’s Inflation Reduction Act.

Basically, one key issue there is that there’s a lot less interest in the so-called intermittent resources. More fundamentally, though, they’re kind of expensive by the standards of the Inflation Reduction Act. If you sort of look at the Office of Tax Assessment, at the Treasury’s calculations of where most of the spending in the IRA is going to go, it’s very concentrated in those two. And as we’re about to see next year, at the end of 2025, Trump’s signature individual income tax cuts are going to expire. Those are over $3 trillion in cost, to extend for 10 years. And so, if only for the sort of political reason of fiscal conservatism, there’s a lot of pressure to try and find pay-fors. And clean energy is something that is a lower priority for the Republican Party generally. Keep in mind, that’s not strictly a legal thing. Really, the question is concerning looking for things that look good to cut from a Republican point of view.

But one major constraint to this is that a lot of manufacturing projects, about— over $90 billion, or over 90% of the value, as far as we can tell— are going to Republican and politically- competitive states, and a lot of those are concentrated in Republican districts. We’ve already seen 14 current Republican representatives in the House agree to basically say that they don’t want the Inflation Reduction Act tax incentives to be repealed too hastily or too completely, with a subtext that it would jeopardize some of the demand side of projects in their districts. And likewise, current House Speaker Mike Johnson has said that he would prefer to take a scalpel, rather than a sledgehammer, to some of those energy incentives.

So there’s sort of two pressure points. There’s the politics of fiscal constraint, which is something that hasn’t bound Trump much historically, but does impact the Freedom Caucus and some of the other conservative factions in the house. And then there’s the politics of jobs and re- industrialization and energy availability, which have a lot more play in a bipartisan manner, but in particular with Trump and certain moderate parts of the Republican base.

Stone: You know, I want to throw out an interesting detail that I found in my reading. There was an article a couple weeks ago in Canary Media, and it pointed out that the Department of Energy’s Loan Programs Office has $400 billion in lending authority. But per the article, only $13 billion of that has actually been closed. Another $40 billion or so is conditional. And that leaves three $50 billion of uncommitted loan authority. What’s your expectation for that uncommitted loan authority going forward?

Flakoll: Well, there’s two ways this could go. Right? We could see it a bit more like the Trump administration’s treatment of the loan programs office in its first term, where it mostly went inactive and only closed one loan to complete units three and four at the Vogel Power Plant in Georgia. The other possibility is that it gets repurposed for things which are sort of closer to the Republican base. So think carbon capture, potentially clean hydrogen and other sort of sources of base load, or perceived reliable clean power and manufacturing. So again, nuclear is a possibility, sort of like Vogel previously, especially because nuclear restarts have grown very popular with the tech industry to try and fuel their upcoming data center demand.

On the other hand, there’s also a lot that’s dedicated for advanced technology vehicle manufacturing that has, to large extent, been used for US-based auto plants. And also, critical minerals mines on US soil. There’s a pretty strong constituency for diversifying supply chains for those goods away from dominant producers like China.

But of course, to some extent, this is complicated by the politics of Elon Musk’s involvement in the Trump administration. You’ve seen Elon Musk is Co-Head of the DOGE— that is the Department of Government Efficiency, not actually a department— claim that they might look into the recent loans to Rivian or Samsung SDI, things that would basically bring other manufacturers into a more competitive space in the clean vehicle space.

One big complication is that the Government Inspector General, I believe, just put out a report about potential conflicts of interest at the loan programs office in the last few days, and I think that substantially complicates the picture of future loans going forward. Multiple things might happen, but there’s certainly going to be a renegotiation of the DOE’s role, for sure.

The key thing to keep in mind, though, is that the DOE is actually a fairly fiscally conservative way of funding clean energy innovation, right? Like a bank, the government appropriates a small amount of money, and then a much larger amount of loans can be made on the back of that small appropriated amount, just so long as the loans are ultimately repaid at a profit to the US Treasury, which has been the case with all but 3% of loans of the DOE’s lifespan. Including, most notably, the loan that got Tesla off to the ground running. So there’s a lot of possibility here, and I think we just need to see which way the chips end up falling.

Stone: So Meredith, as was mentioned earlier, Trump has vowed to kill offshore wind, quote, “on day one.” What actions will he be likely to take to slow development of this industry? And I want to note that the industry has already suffered a number of setbacks in terms of canceled projects, you know, on the Atlantic seaboard. How much additional damage could this do to the industry?

Annex: Well, we’re actually already seeing an impact on the offshore wind industry in the US. What we’re really seeing right now is two things, even without any changes to the Inflation Reduction Act tax credits. There has been a pullback in terms of developer interest in the US. So a lot of companies are now taking a much more conservative stance to their pipeline of projects. You’ve seen companies like Total, RWE, Orsted, GE— these are really, really big players in the offshore wind space— saying that they’re going to reconsider their US offshore wind plans after Trump’s re-election.

Another thing that we’re seeing is challenges around the potential for permitting of these seabeds for offshore wind in the future. So in order to build these projects, you first need a seabed lease, and you need a permitting to be done at the federal level, usually by the Department of Interior and Bureau of Ocean Energy Management. Those are political appointments. We could see that activity stall under this new Trump administration, based off of what he’s saying.

That’s a huge change from the first Trump administration. It’s worth noting here, under the first Trump administration, we saw more US offshore wind seabed leases awarded, permits awarded, than we had under the Obama era. So this is a real about face in terms of what a second Trump term could look like, as opposed to a first Trump term.

As a result of this, we’ve already reduced our forecast. So BNEF’s forecasts for offshore wind in the US, cumulative additions by 2030, is now 13% lower than it would have been prior to the election. We’ve reduced our 2035 cumulative forecast by about 29% as well, and that’s just accounting for a likelihood that there will be fewer sites available to keep developing.

On top of that, there is the questions we talked about with the Inflation Reduction Act. As we said in our base case view, that is likely to stay in place. As Derrick said earlier, people are talking about tweaks or adjustments, not a major removal at this point in time, although we’ll see what happens in the new year and whether that language changes. But it’s worth noting, offshore wind is going to be particularly sensitive to the presence of Inflation Reduction Act tax credits, because it is such a capex heavy undertaking. You need that type of tax credit assurance for the revenue certainty.

Stone: Well, another interesting aspect of this is, there’s the supply chain for the offshore wind industry, and there’s the shipping industry, which has been buoyed— no pun intended— by the development of offshore wind and its prospects. Obviously, if we are going to see cutbacks in the rate of offshore wind development, that would impact these other areas in the supply chain. And that brings some political questions as well, I would imagine.

Annex: Yeah. So, we’ve tracked $7.6 billion worth of planned port investments in the US for offshore wind. Under our previous scenario, that may not have been quite enough to keep pace with the potential for the industry. But given our recent reduction in forecast, our expectations around tighter permitting, that’s likely to be sufficient. There is a question, how many of those investments keep going forward? Do some of them stall, for instance, under this new political environment and due to lower demand from the offshore industry? We’ll see what happens there. But on the port side, we would see the permitting to be the bigger issue in the US, over ports.

And on the vessel side, the US benefits from being able to take advantage of international vessels as well for many of its projects. Even with Jones Act, you can take advantage, as long as you park the vessel in the right part of the ocean. You won’t be susceptible to those. There’s only one ship in the US right now, only one vessel, for US offshore development. But that doesn’t mean that there aren’t vessels available.

Flakoll: There’s one interesting political wrinkle to this, which is that you’ve seen support for offshore wind vessels and localization of supply chains from Steve Scalise, who is one of the most powerful Republicans in the House. He and his wife were actually at the naming ceremony for the first US-built service operation vessel for the offshore wind market, despite the fact that, ironically, there hasn’t been a lot of actual interest in offshore wind in the Gulf. But I think there’s a calculation among some in the Louisiana delegation—which, it should also be noted that speaker Mike Johnson is from Louisiana— that there might be an opportunity for some offshore oil and gas related industries if offshore wind remains in the US. Now, the Florida delegation and various other parts of the Republican Party don’t necessarily see it that way. But I think it’s an interesting political wrinkle to keep in mind.

Stone: You know, I’d like to take this a little closer to home, just for a moment. Under the coming Trump administration, IRA incentives for residential clean energy such as solar PV could also be at risk. Meredith, could you tell us more about what’s happening there?

Annex: Yeah. The residential space within the US is a particularly tough one. The US has amongst the highest cost, about the highest cost, for residential solar installations in the world. A lot of that has to do with the tariffs that are in place on solar module imports, as well as the tax credit schemes, creating a higher cost environment themselves. Overall, when we run our numbers and we look at what this market would look like without the tax credits, we do see a drop. So we see about a 18% drop in cumulative additions between 2024 and 2035 without the tax credits. Now, some of the impact would be offset by the installers offering some cheaper modules, by not pocketing the benefits of the tax credit, by reducing legal fees. But equally, another challenge here could be, whatever inflation does will have a major impact on that market.

Stone: So I want to jump to that tariff issue. So Trump has proposed 60% tariffs on Chinese imports. Your analysis suggests that this will have an uneven impact across clean power subsectors. What sectors would be most impacted and why?

Flakoll: So there’s sort of three that we tend to look at in particular—wind, solar, and batteries, or energy storage. Of those three, tariffs on Chinese solar are already prohibitive. And so the vast majority of what the US imports is from Southeast Asia, often involving Chinese companies in the supply chain. But primarily we’re talking about places like Thailand, Malaysia and so forth. And there have been rising tariffs on those under the Biden administration. You might expect to see a little bit more activity from Trump, maybe moving a little bit faster and at higher rates, unlike Biden, who famously gave two-year moratoriums tariffs on Southeast Asian solar to prevent the market from being disrupted.

On the other hand, the wind supply chain in the US tends to be fairly localized. Chinese manufacturers are increasingly looking at global strategies, but I don’t know that they’re targeting the US that much. The big question here concerns battery imports, and in particular, imports for energy storage systems. The kind of things you plug into the grid. Some of my colleagues have done research that indicates that even if you were to stack up a 60% tariff on imports of Chinese batteries, and then you added in the incentives for US battery manufacturing and for domestic content bonuses for battery installations on developments, the Chinese batteries are still actually price-competitive with the US. So you could see a somewhat more aggressive posture from Trump as he actively tries to eliminate that competitiveness.

And of course, this is also tied in with concerns about China’s role in the critical mineral supply chain, the auto industry and other things there. We should note that the vast majority of clean tech manufacturing investment that we’ve tracked is tied to batteries, primarily for the electric vehicle supply chain in the US. But then there are questions about spillover effects and trying to protect a growing market. And so you might expect to see a particular amount of sensitivity and action there.

Stone: I want to jump to another aspect of all this, and that’s that Trump has indicated that he intends to restrict clean energy development on federal lands. Derrick, I’d like to ask you about this. How might he do that? And I guess also very important is how critical are federal lands for clean power development?

Flakoll: Well, there’s a set of several different policies that the Biden administration was pursuing. Maybe the most public or notable one is the Western solar plan. It’s sort of an evolution of an Obama-era policy that never really had a lot of time to work its magic. It would extend a sort of categorical permitting rule across not just the American Southwest, as Obama targeted, but all the way up to Idaho and the American West more broadly.

And so there’s some possibility of Trump trying to sort of focus on that less. Obviously, as well, there are federal permits and leases on federal lands, just like there is for offshore wind. And often those leases are quite discretionary, right? You saw Trump pump up oil and gas leases and sort of throttle back renewables leases on federal land during his first term, and you saw the reverse under Biden after Trump. So I think that level of discretion and focus could play a fairly large role in changes to federal resource management.

And what does that actually mean for the market? So as an example, the Biden administration recently had a goal to permit about 25 gigawatts of clean energy projects across solar, wind, geothermal and so forth, on federal land. That is equivalent to more than the annual build of wind and storage in the last year, or about 10% of cumulative solar build, depending on whether you’re reckoning by AC or DC. The point being, it’s a fairly substantial chunk, if not one that would be totally definitive of the market as whole.

Stone: So this gets us kind of to a key question that I posed at the beginning of this conversation. And that is, the extent to which even a worst case scenario of incentive rollbacks and trade policies under a coming Trump administration, may actually slow the development of clean energy, clean power in this country. And your research indicates that under a worst case scenario, in any event, you expect the trajectory of growth to kind of rebound by 2028 or so. What’s the reason for that?

Annex: So overall, what we did was we modeled a worst case scenario whereby the Inflation Reduction Act tax credits disappear next year. So as long as you enter into construction next year, you’re able to take advantage of them, but otherwise they’re gone. This did a couple of things for our analysis. So first of all, it reduced our cumulative build forecast between 2025 and 2035 by 17%.

The vast majority of that impact is on the wind side of things. Wind needs these tax credits to have more sites be economically competitive today. Without those tax credits, because of the higher capital expenditure of these projects, you’re very resource sensitive. And that can mean that the best sites, if they don’t have greater permanent connection, aren’t available to you. You end up with less build. So our wind forecasts for onshore wind reduced by 32% under this scenario.

For solar, however, there’s a very interesting way that this all plays out. First of all, we would actually expect, potentially, a reduction in capital expenditure for utility-scale solar projects if the Inflation Reduction Act tax credits were removed, because you have reduced legal fees. So even though you see a significant drop in the near term, because you have projects that rushed to build to take advantage of the tax credits, and therefore you’ve depleted your ready-to-build pipeline. You have to repurpose that. We actually see the economics for utility-scale solar come back into effect, and annual build levels return to kind of business as usual levels today, by 2028 or towards the end of this decade. And similarly, with wind, you start to see lower costs kick in later on in the decade, and build rates return to 2024 levels.

So in both of these sectors, it’s kind of a short-term impact. You really escalate the development timelines of the projects that are available today to take advantage of the tax credits while they’re there. You then have to replenish your pipeline. But by the time that pipeline is replenished, your economics have also improved.

Stone: So it’s basically the takeaway here that despite the potential for negative policies, economic fundamentals of the industry will ultimately prevail?

Annex: Absolutely. And this helps to trigger continued demand for renewables as well, outside of what happens with tax credits. We mentioned this earlier. We still see robust demand from utilities and corporates. When you take a look at the levelized cost of electricity from wind and solar in most of the markets, like most of these big markets within the US, you’ve got a very competitive pricing profile. You’ve got a lot of companies that are very comfortable now with signing PPAs for these assets, and you’ve got a good story to be told. The returns aren’t going to be as high as what you can get with the tax credits involved, but they’ll still be economical.

Stone: So there’s a related question I want to ask here. So the Trump administration, or Donald Trump going into the Presidency, has indicated his enthusiasm for fossil fuels and that he would open up public lands for further fossil fuel development. Will the oil and gas industry actually bite at this opportunity, given that it could really lead to further supply, lower prices for these commodities, that they may not find all that attractive?

Flakoll: I think there’s potentially two different stories for the oil industry and the gas industry, while acknowledging that maybe about 30% of US gas actually co-produced from oil, so there is some inter linkage. Oil is already a global commodity with prices set by the global market. And certainly we’ve heard over the last few years from oil and gas majors who are concerned about capital discipline and losses they took during the fracking revolution over the last several years. And right now, it seems they’ve been looking to sort of consolidate, to focus on profitability over expansion, and to be sort of careful about the wells they’re drilling.

That said, of course, there is always the possibility that they simply stockpile federal leases and permissions in order to develop projects, if they’re very quickly declining fast-developed fracking based wells, when the prices are right. It’s particularly important as we consider that the Permian Basin, which is kind of the driver of oil and gas development in the US right now, is increasingly moving from private lands in Texas into federally-controlled lands in New Mexico. So we could see a sort of greater impact of federal permitting and lease production in that sense.

In gas, however, you do have this sort of major price differential between the domestic gas market, which is fairly cheap— especially because, again, so much gas produced in the US is virtually free or a co-product— and global liquefied natural gas prices. Now, the Trump administration has said that he would permit a hell of a lot more liquefied natural gas, considerably faster. But then that again runs into the possibility of a glut on the global market, especially considering how much capacity is already online and permitted to go online in the US.

So there is maybe more of a bullish story for natural gas, at least being extracted and exported. But then, of course, there are questions about what price impacts that’s going to have on domestic gas prices and what that’s used for. I haven’t had the chance to examine the Department of Energy’s recent LNG study yet, but that talks a little bit about their level and expectations of price increases.

Annex: Yeah. And Derrick, as you’ve correctly said, I think one of the biggest unknowns is the US domestic market and what ends up happening there. One of the biggest use cases for gas in the United States is the power sector. And we could see more use of natural gas in the power sector under Trump administration than we would have expected otherwise. Part of that would come from EPA standards potentially being eased, permitting around new gas turbines being eased as well. And that changes, potentially, some of the dynamic around how much new demand, especially from data centers, we expect to be met from natural gas, natural gas to CCS, versus renewables, or the kind of future technologies like nuclear and geothermal and long duration storage.

What we’re finding now is within the last couple of weeks, a large number of gas turbine contracts being signed, allegedly to go towards data center— gas-fired turbines for data center demand. Now, that said— and yeah, Derrick, you probably have a few examples that you can pull out here—there are parts of the US where it is faster to permit and build solar and storage or wind compared to natural gas projects, still. So that balance is going to depend on by region.

Flakoll: Yeah. So as a pretty key example— in Texas, you know, the heart of the oil and gas market in the US, it is actually faster to build wind, solar and battery storage than it is to build gas. We estimate about a 26-month lead time for wind and solar and a 17-month lead time for battery storage, as compared to a 42-month lead time for a new gas plant.

And so obviously, there are certain characteristics that can be attracted to gas. Deployability, dispatchability. But at the same time, there’s a reason that Texas has really rapidly become the biggest market for solar and storage in the US, and it’s not regulatory mandates. It’s just the fact that it’s quick, cheap and reliable to build.

And of course, that doesn’t even get into the fact that there’s a lot of markets in the US that have strong renewable portfolio standards. In places like Michigan, Maine, Massachusetts, Minnesota— have strengthened their renewable portfolio standards in recent years. And so there’s a mandate on power companies to meet a lot of this growing demand with renewables. And so I think between the sort of economics cases, the speed benefits, and, frankly, regulatory mandates in a lot of cases, it’s a fair question how much of that load growth is actually going to be met with gas as opposed to clean power of various kinds.

Stone: In the research that we’ve been talking about, you mentioned that there are going to be some global impacts on clean energy development related to Trump’s expected energy policies. What stands out here, Meredith?

Annex: Yeah. The global impacts here are quite interesting. I think one of the questions that’s been coming to us at BNEF has really been, you know, if the US market will just potentially see a decline, as we’re saying, under our tax credit removal scenario— would that mean more money going elsewhere? And we’re a bit dubious about that. What we find right now is that there’s a lot of capital out there that’s interested in renewable energy, and there’s not enough renewable energy projects that make the desired return for that money to go into. So it’s not a lack of available capital, it’s a lack of projects at the right level of return that investors are looking for that’s really holding the market back right now at a global level. And what happens in the US doesn’t change what happens in a different market unless that market itself changes its own policies.

So overall, what we really need to see is the global market continue to make progress on grid de- bottlenecking, on building out their grid networks, on permitting reforms. These are the biggest things that matter for renewable energy development globally, followed by revenue certainty, especially for markets that have high levels of solar penetration.

The other thing that we could see here at a global level is, under Trump, we’re likely to see less US involvement or support— potentially no support— on the international climate negotiations. These international climate negotiations, it’s always a bit hard to pinpoint the impact that they actually have in the market. But there are two things that you can point to in the last couple of years that have really made a difference through the UN negotiations. One has been the acceptance of net-zero at a global level. That’s something that we’ve really seen happen since around 2020, and that’s because of these— in part, because of these international negotiations and international commitments. The other, which came out of COP 28 last year, was the commitment to triple renewable energy capacity by 2030. Now, whether these targets that have made a huge difference in terms of global ambition and global clarity on direction change? Probably not. But what could happen is a lack of new ambition, or potentially a lack of funding available through the UN mechanisms to help make them a reality.

Flakoll: If I could just add in here, I would definitely say that looking to global renewables financing with a Republican Trifecta that’s controlling the Presidency and both Houses of Congress, international aid is not something that’s likely to be growing much, with the exception of potentially export credit for US manufacturing. And there are a variety of ways that might play out. I’ve heard discussions in the Republican caucus about trying to support a large bill of sale globally for US-built nuclear power plants. And there’s also questions about what implications this could have for liquefied natural gas terminals, or for even, potentially, US- manufactured products, including green energy goods. But I would look firstly to effects on nuclear and gas and the impacts that would have on other energy sources’ competitiveness. And then there’s some— I think a little bit more remote, but still possible— possibility that support for US manufacturing goods extends to clean energy-related goods.

Stone: A final question for you here, Meredith. So we’re in December of 2024, waiting for the new administration to come in. How are investors taking this right now? Are they holding back, waiting to see what’s about to happen? What’s the sentiment?

Annex: I think it’s a lot of waiting to see. Now, that doesn’t mean that we’re seeing a downturn in investment. I think people are still executing on the projects where they make sense and where they’re confident in the business case going forward. But I would imagine— and already, again, we’ve seen this with offshore wind—we’re going to see a bit more cautiousness until the future is cleared in the US.

I think when you’re talking about something like the Inflation Reduction Act tax credits, it’s such a binary impact on the future of the sector. So even right now, when we’re pretty confident that the economics in the US are strong, that still doesn’t mean you’re going to want to make huge shifts in your strategy, or huge new commitments, in an era of policy uncertainty. I do expect that come Q1, we’ll probably start to see a bit more of that confidence return. One way or another, we’re probably going to have a better sense of where clean energy is going to sit in the pecking order for the Trump administration going forward.

Stone: Meredith and Derrick, thanks for talking.

Annex: Thanks very much, Andy.

Flakoll: It’s been a pleasure.