Energy Transition Beyond Politics: Harris vs. Trump

The possibility of another Trump administration doesn’t necessarily pose the existential threat to clean energy that some might assume. The energy transition is now deeply embedded in market dynamics, investor demand and decentralised innovation—forces strong enough to carry momentum forward even amid political shifts. While the policies of each administration would naturally influence the pace and priorities within the sector, the underlying economics have grown resilient to changes in federal support.

Market-Driven Momentum in Energy Transition

The shift to renewables has advanced from a concept driven by policy to one anchored in economics. Solar and wind now frequently meet or beat the cost of traditional energy and declining battery storage costs have made renewables increasingly viable for both power and grid resilience.

Capital investments in clean energy are driven more by market dynamics than government policy, with institutional funds heavily weighted in ESG-friendly assets. Clean energy has become more than a temporary trend—it’s a structural shift in energy markets. While federal policies like the Inflation Reduction Act (IRA) have provided a major boost, the deeper forces at work are unlikely to be upended by any single administration.

Corporate America and Consumer Expectations

Major U.S. companies have already woven clean energy into their long-term strategies. Utilities like NextEra and tech giants with ambitious Net Zero goals are signing PPAs¹ to lock in renewable energy over years and this is driven not only by environmental concerns but also by the need to stay competitive. With consumers, employees and investors increasingly expecting companies to prioritise sustainability, clean energy has gone from a “nice-to-have” to a long-term strategic imperative.

Under a Harris administration, companies involved in solar, wind, battery tech and EVs would likely benefit from sustained federal support, including tax credits and incentives to make renewable energy more accessible. This would be especially valuable in regions where private investments have lagged. Companies like Tesla, Sunrun and First Solar that have aligned their strategies around federal subsidies would continue to benefit from Harris’s likely continuation of Biden’s policy trajectory.

Interestingly, oil and gas equities have often performed well under Democratic administrations due to regulatory expectations and under Biden, the U.S. has reached peak hydrocarbon production, now accounting for 20% of global production. This underscores that traditional energy remains resilient, even within a pro-renewables agenda.

A Broader and Balanced Energy Approach Under Trump

A Trump administration, while typically associated with traditional energy, would be unlikely to oppose clean energy outright. Trump’s approach might emphasise an “all-energy” strategy that includes nuclear, natural gas and renewables to drive American energy independence. His stance has evolved toward a more inclusive view, seeing clean energy as an essential component of America’s future economy, given its role in job creation and technological innovation.

Trump’s support of a more diverse energy mix could strengthen American businesses across the energy spectrum without sidelining renewables. His broader energy approach also aligns with his pro-business stance, favoring a flexible energy policy that keeps U.S. energy competitive globally. A repeal of the IRA under Trump might create some headwinds for clean energy projects, but Biden has strategically allocated up to 90% of IRA funds by the end of the 2024 fiscal year, making a full rollback challenging and likely insulating the sector from major setbacks.

Technology Is Transforming Cost Structures

The energy sector’s rapid technological advancements in storage, EVs and grid resilience have rendered it less reliant on government incentives. Battery costs are declining, EVs are approaching cost parity with combustion vehicles and green hydrogen is scaling up. Technologies like nuclear fusion, carbon capture and energy efficiency advancements are beginning to mature, making them competitive in the open market.

This trend signifies resilience and opportunity for clean energy. Trump’s free-market orientation could indirectly benefit clean energy technologies by focusing on competitiveness and efficiency. Private capital would likely continue to flow into these areas for their inherent advantages, even if explicit federal incentives are scaled back.

State, Local and Global Policy Independence

As seen during Trump’s first term, state and local governments have significant power in energy policy. States like California and New York have set ambitious climate goals that pushed renewable investments forward even as federal policies leaned toward deregulation. Over half the U.S. economy is represented in the U.S. Climate Alliance, which commits to emission reductions in line with the Paris Agreement.

Internationally, clean energy demand remains strong. Europe is doubling down on renewables and China is increasing green tech investments. With global demand for clean energy solidified, U.S. firms understand the advantage of positioning within this economy and are likely to adapt regardless of changes in federal policy.

Harris vs. Trump: Two Approaches, One Transition Path

If Harris were to take the reins, her administration would likely build upon Biden’s progress. The IRA, Bipartisan Infrastructure Law and CHIPS Act together have catalysed approximately $910 billion in investments across clean energy, semiconductors and infrastructure—about three times the allocated IRA spending. Harris’s policies would likely double down on these initiatives, pushing for greater U.S. energy independence from fossil fuels through continued tax credits and incentives. Her administration would also likely aim to raise the share of renewables in the U.S. energy mix, with a clear focus on sustainable technology.

Trump’s potential second term would likely support a broader array of energy sources, favoring a diversified energy landscape that includes renewables, nuclear and natural gas. Given the importance of these sectors for job creation and U.S. energy security, Trump’s approach would aim for a balanced strategy that reinforces energy independence. Despite his historic skepticism toward clean energy, Trump’s evolving stance acknowledges that renewable energy has become an integral part of the American economy, from job creation to innovation.

Closing Thought: Market Dynamics Drive the Transition

The energy transition today is powered by market momentum that is resilient enough to withstand political changes. Innovation across green hydrogen, battery storage, solar and wind is transforming global energy beyond what any single administration can influence. With the political landscape poised for potential shifts, the market narrative for clean energy remains robust.

As we move forward, the resilience of clean energy is embedded in decentralised, market-driven forces that transcend short-term politics. Whether under a Harris administration doubling down on federal support or a Trump 2.0 administration emphasising a broader energy mix, the path forward is shaped by economics, technology and consumer demand—creating an environment where clean energy will continue to thrive.