Upset and Optimism in the Clean Energy Industry over Donald Trump’s Reelection

Nov. 12, 2024
With former President Donald Trump returning to the presidency, some members of the clean energy industry are worried about the fate of the Inflation Reduction Act, along with other federal policies that support clean energy. But Tim Hade, co-founder of Scale Microgrids, sees an opportunity with the new administration to reduce red tape that undermines clean energy development.

On the one hand, distributed energy resource (DER) and microgrid industry members are worried that the second Trump administration will undermine the Biden administration’s laws that address climate change and support microgrid and other DER development.

They have been especially concerned that Trump, when he begins his second term as president in January, will scrap or roll back federal Department of Energy (DOE) incentives and the Inflation Reduction Act (IRA). The IRA has created 334 major clean energy projects and has helped boost the cumulative investment in U.S. electric vehicles (EV) and batteries to $312 billion, according to a report from E2, which promotes measures that support the economy and environment. Much of that investment has been in Republican states.

“My biggest concern is that if the GOP manages to take all three branches of government, it would allow them to terminate the Inflation Reduction Act and its incentives for renewables, hydrogen, batteries and EVs,” said Kelly Gloger, managing partner at Microgrid Design Group.

Will Elon Musk help eliminate the “mound of bureaucracy?”

 On the other hand, some see Trump’s upcoming presidency, the result of the Nov. 5 election, as an opportunity to streamline bureaucracy, accelerate DER interconnection rates and reduce permitting hassles, two thorns in the side of clean energy developers.

“Trump winning the election is not necessarily a bad thing for the cleantech industry,” said Tim Hade, co-founder and chief development officer at Scale Microgrids. Trump, who is focused on cutting bureaucracy, has said that Elon Musk, the founder of Tesla, will play an important role in the new administration.

“The view of conservative entrepreneurs like Elon Musk is we have to get rid of the mound of bureaucracy,” Hade said. Bureaucracy boosts costs and slows project progress. For example, the approximate cost to install rooftop solar in Australia and Germany, which have similar supply chains as the U.S., is $1/watt, he said. In the U.S., it costs $4/watt. Much of the cost in the U.S. is legal fees and permitting requirements that don’t exist in comparable countries, Hade said.

In contrast to Hade’s optimism, environmentalists are sounding the alarm. The Sierra Club has said that Trump will eliminate many of the DOE’s clean energy programs and reverse the Environmental Protection Agency’s (EPA) labeling of carbon dioxide pollution as a threat to human health. In addition, the Sierra Club expects that Trump will try to terminate the federal government’s ability under the Clean Air Act to adopt California’s high standards for tailpipe emissions.

Trump has also insisted he would roll back EPA vehicle emissions standards and incentives that promote the production and adoption of EVs.

Will Musk help turn Trump into a climate change believer?

It’s unclear whether Musk, who believes in climate change and is expected to be part of the new administration, will influence Trump’s opinions about clean energy and climate change.

While it’s uncertain exactly what actions the new administration may take, it’s clear that states are expected to continue their leading role in supporting clean energy deployment.

Cameron Brooks, executive director at Think Microgrid, an advocacy group and affiliate of Microgrid Knowledge, said, “The federal election is much less relevant to the overall microgrid and DER industry than state-level politics and regulations.”

Given the increasing intensity and numbers of storms, he and others argue that the need for energy resiliency won’t go away, and that both Democrats and Republicans favor ensuring resilience.

An uptick in bipartisan support for energy resilience

“There’s still some very real things that have increasing bipartisan support around resilience and storm restoration,” Brooks said. “At some level, microgrids occupy a space where they have a real useful role to play.” In addition, Brooks anticipates that the federal government will provide funding and tax incentives for grid hardening, which generally has bipartisan support, he said.

The new administration will favor investments in traditional central utility infrastructure projects, he predicted. “Things like distributed energy are probably going to be more relevant at the state level,” he said.

Some industry members argue that, in spite of the election results, clean energy is here to stay.

Republican support for the IRA

While many fear that the IRA will be repealed, it has attracted the backing of some Republicans in Congress, suggesting that all or part of it may remain in place.

In August, 18 House Republicans sent a letter to House Speaker Mike Johnson asking him to focus on business and market certainty as he considers efforts to change or gut the IRA.

“Today, many U.S. companies are already using sector-wide energy tax credits – many of which have enjoyed bipartisan support historically – to make major investments in new U.S. energy infrastructure,” the letter said. “We hear from industry and our constituents who fear the energy tax regime will once again be turned on its head due to Republican repeal efforts.”

Repealing energy tax credits, especially those that led to projects already underway, would stop ongoing development and undermine private investments, the letter said. “A full repeal would create a worst-case scenario where we would have spent billions of taxpayer dollars and received next to nothing in return.”

If they’re completed, all 334 projects announced since the IRA was passed would create at least 109,278 new jobs and bring at least $126 billion in direct private investment to 40 states, according to the E2 report.

IRA repeal would be required by Congress

While Trump can direct the administration to review regulations – including tax regulations implementing the IRA – the IRA can only be repealed by Congress passing another law, said Tim Urban, who leads the tax policy practice at law firm Bracewell.

“If the GOP indeed achieves a so-called ‘trifecta’ - i.e., control of White House, Senate and House – they will be able to process a budget reconciliation bill nullifying Democrats’ ability to filibuster in the Senate,” he said. In that case, some members of Congress might call for repeal of all or part of the IRA.

A move toward energy permitting reform

In addition to demonstrating support for the IRA, some Congressional Republicans are also focused on permitting reform.

U.S. Sens. Joe Manchin, I-W.Va. and John Barrasso, R-Wyo., chairman and ranking member of the U.S. Senate Energy and Natural Resources Committee, have proposed the Energy Permitting Reform Act of 2024.

While the threat of the new Trump administration undermining clean energy is on the minds of industry members, many say that clean energy is here to stay, especially because it can provide resilience during the increasing numbers of storms.

“The march toward renewable clean energy is both inevitable and the right thing to do,” said J.D. Dillon, chief marketing officer of solartech manufacturer Tigo Energy in a statement. “It will happen regardless of who is in the White House or Congress. It may slow down or speed up, but it will continue.”

Keith Thomson, co-founder and convenor of the Critical Services Microgrid Group, said, “The need for resiliency, local jobs and economic opportunities and preparedness for increasingly frequent extreme climate events are even more important now than before. An election didn't change that.”

A call for industry members to connect with Trump transition team

Scale Microgrids’ Hade added that it’s important for clean energy industry members to avoid complaining and instead meet with their Congressional representatives and Trump’s transition team to rally support for the industry.

“We have a massive bipartisan coalition from people committed to building the best electric grid in the world,” Hade said. “Most people in our industry are focusing on what we need to do to protect ourselves after the election. But we need to think about how to do this differently. Find people who will run Trump’s policy development on his transition team and talk to them.”

 

About the Author

Lisa Cohn | Contributing Editor

I focus on the West Coast and Midwest. Email me at [email protected]

I’ve been writing about energy for more than 20 years, and my stories have appeared in EnergyBiz, SNL Financial, Mother Earth News, Natural Home Magazine, Horizon Air Magazine, Oregon Business, Open Spaces, the Portland Tribune, The Oregonian, Renewable Energy World, Windpower Monthly and other publications. I’m also a former stringer for the Platts/McGraw-Hill energy publications. I began my career covering energy and environment for The Cape Cod Times, where Elisa Wood also was a reporter. I’ve received numerous writing awards from national, regional and local organizations, including Pacific Northwest Writers Association, Willamette Writers, Associated Oregon Industries, and the Voice of Youth Advocates. I first became interested in energy as a student at Wesleyan University, Middletown, Connecticut, where I helped design and build a solar house.

Twitter: @LisaECohn

Linkedin: LisaEllenCohn

Facebook: Energy Efficiency Markets

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