As the country awoke a week ago to the news of an impending Donald Trump presidency, shares in wind and solar energy companies quickly plummeted. That makes sense: Trump has promised to revive the faltering coal industry and overturn many of the climate and energy priorities established by the Obama administration, from the Clean Power Plan to the Paris climate agreement.
But while all of this may look like bad news for renewables, some experts are arguing that the arrival of the new administration hardly spells a death knell for the industry. So far, they note, the inexorable march of wind and solar has largely been driven by both private-sector forces and the policies of individual states, more so than federal influence — and it’s unlikely to be easily halted.
To be clear, “the Trump administration has very few scenarios in which it’s good for the renewables industry,” said Christopher Knittel, director of the Center for Energy and Environmental Policy Research at Massachusetts Institute of Technology. But he added that not all possible outcomes are “terrible,” either. For one thing, “a lot of the transition to renewables is coming because of state-level policy, and those are likely to still be there [in the Trump era],” he pointed out.
Clean energy in the states
A new report, released this week by the Georgetown Climate Center, illustrates the leaps made by 19 individual states across the country through strong policies aimed at diversifying the energy landscape and cutting carbon emissions.
Nevada, for instance, leads the country in solar capacity per capita, according to the report, and its Renewable Energy Tax Abatement program has helped allow for the construction of 29 large-scale renewable energy projects. New York and California have both mandated that power companies source 50 percent of their electricity from renewables by the year 2030. Meanwhile, energy-saving programs in Massachusetts have made it the most energy-efficient state in the nation — and since 2007, its wind energy capacity has grown 70-fold and its solar capacity has grown 781-fold.
“In recent years, as you see in the report, a number of states have expanded or enacted even stronger…renewable standards,” said Vicki Arroyo, executive director of the Georgetown Climate Center. “These policies are often popular because they generate jobs locally, they provide a clean source of energy and they create jobs that can’t be exported.”
And for these reasons, she added, they often garner bipartisan support. Several of the states highlighted in the report have notably conservative legislatures, such as Louisiana and Tennessee.
Under Trump, “we might be back in that situation where we don’t have a federal program that’s really driving those reductions, but the states will have a coalition willing to create opportunities to promote renewables,” Arroyo said. “And many of them I think will say that they’re doing that as much for job creation as for the environment.”
Falling prices for renewables
Indeed, market forces — independent of the federal government’s influence — have been among the most important factors in the country’s changing energy landscape. Federal climate programs did relatively little to upend the coal industry Trump now wants t o revive. On the contrary, competition from cheap natural gas is widely recognized as the biggest blow in the decline of coal.
To be sure, renewable energy sources could add to coal’s misery. A report released by the Department of Energy at the end of September largely attributed the recent expansion in wind and solar energy to their dramatically falling prices — for instance, costs associated with land-based wind power fell 41 percent since 2008, while those of distributed solar fell by about 54 percent.
Also, the Clean Power Plan, the Obama administration’s key strategy to tackle climate change by slashing carbon emissions from power plants, would almost certainly accelerate the growth of renewables. But while its possible demise under the Trump administration would be a definite disappointment for the renewable energy industry, it wouldn’t necessarily be a disaster, either.
As Arroyo pointed out, the plan (which is currently the subject of a highly fraught legal battle in the D.C. circuit court) has not yet been implemented, and wind and solar have still been rapidly expanding without it. In a set of projections released earlier this year, the U.S. Energy Information Administration indicated that the Clean Power Plan would boost renewables and speed the decline of coal — but it also suggested that renewables would continue to grow even without the plan.
Tax credits at risk?
However, these projections also assume the wind and solar industries will continue to benefit from federal tax credits — one of the few major ways the federal government has substantially influenced the expansion of renewable energy. At the end of last year, Congress moved to extend several of these credits for another five years.
Some recent speculation has suggested that the credits don’t fit in with Trump’s proposed tax plan — and indeed, Trump, himself, has recently pledged to “cancel all wasteful climate change spending.” It’s unclear whether this promise was meant to include the current breaks for renewables. But if he were to oppose, he’d likely have to overcome objections from Republicans as well as Democrats.
That said, should the tax credits actually disappear, it would likely spell a dark future for wind and solar energy in the nation. The MIT Technology Review recently pointed to a new analysis from advisory firm Lux Research, which projected that the growth of renewables would flatline under a Trump administration that succeeded in doing away with the federal tax credits.”
“A domino effect”
There is one other indirect, but potentially major, way that a Trump presidency could affect the renewables industry on a global scale, according to MIT’s Knittel. He and other climate experts are concerned that any U.S. withdrawal from the Paris agreement could seriously disrupt the larger international community’s commitments to reducing greenhouse gas emissions.
“If the U.S. pulls out of its commitment and that creates a domino effect with Europe, China, India, African nations, then you could imagine the whole system for global climate negotiations breaks down,” he said. In this scenario, global investments in clean-energy infrastructure would almost certainly decline, particularly in developing nations where coal often remains the cheapest and most widely used power source.
For now, Trump’s plans remain murky. At various points, he’s condemned the prioritization of renewables and yet also included them in his vision of an energy-independent society.
In the end, President Obama may have best explained the staying power of renewables in a Monday press conference, his first since the election.
“[E]ven states like Texas that, you know, politically tend to oppose me, you have seen huge increases in wind power and solar power and you got some of the country’s biggest companies, like Google and Walmart, all pursuing energy efficiency because it’s good for their bottom line,” Obama said during the conference. “So what we have been able to do is to embed a lot of these practices into how our economy works and it’s made our economy more efficient, it’s helped the bottom line of folks and it’s cleaned up the environment.”