What Trump's Presidency Means for the Solar Industry

By Gordon Algermissen
November 10, 2016
President Trump Solar

The election of Donald Trump to the office of President of the United States is expected to have a profound impact on the future of environmental and renewable energy policy in America. Trump has suggested that climate change is a hoax perpetuated by the Chinese to make U.S. manufacturing non-competitive. Despite this, the Pew Research Center found that 84% of Trump supporters favor expanding solar energy production. So what kinds of policy can we expect regarding solar over the next four years?

 

The Clean Power Plan and the Paris Agreement Will Be Challenged

President-Elect Trump has selected Myron Ebell to lead his Environmental Protection Agency transition team. Ebell is currently the director of the Center for Energy and Environment at the Competitive Enterprise Institute, a conservative think tank that rejects the idea of human-caused global warming. He is a climate skeptic to say the least. Ebell considers the Clean Power Plan, which requires states to cut carbon emissions from fossil fuel power plants, to be illegal and has said on multiple occasions that the Paris climate agreement is an unconstitutional overreach of legislative power. We can expect Trump and Ebell to do everything in their power to undermine or repeal these agreements and policies, thus increasing the usage of fossil fuels for energy generation. That being said, the U.S. Energy Information Administration still predicts that 60 gigawatts of Coal energy generation capacity will be retired by 2030 and renewable capacity will continue to grow by 4% per year until 2040 without the Clean Power Plan in effect. In much of the country, the levelized cost of energy for solar is already below coal without government subsidy.

 

New Energy Research and Development May Lose Funding

The Department of Energy under the Trump Administration is expected to curb research and development funding for renewable technologies set up under Ernest Moniz. Greentech Media notes that there will likely be a massive "brain drain" under Trump’s Department of Energy. It is difficult to imagine scientists working under an energy secretary that denies climate change. Fortunately, the DOE’s Office of Energy Efficiency and Renewable Energy and Advanced Research Projects Agency have bipartisan support. Since changes to the DOE budget have to go through the legislature, these programs will not be cut without a fight. That being said, the fate of popular DOE programs for the solar industry like SunShot are up in the air.

 

What the Markets are Saying

Solar stocks were hit hard Wednesday morning following the election. President-Elect Trump is expected to allocate more resources toward fossil-fuel dependent energy sectors like oil, natural gas, and coal during his term. One byproduct of Trump’s tax cutting proposals is that the 30% Federal Investment Tax Credit (ITC) for solar could become less effective. Additionally, uncertainty about the future of renewables in the U.S. will likely make investors hesitant and limit the access to capital in the industry.

 

The Silver Lining

Despite these setbacks, the solar industry is still poised for tremendous growth. In December 2015, lawmakers approved the extension of the Federal ITC for an additional 5 years with bipartisan support making it unlikely that Trump will be able to repeal it. Progressive states will likely expand their own incentives for renewable power generation to combat the Federal deficiency as well. If industry trends continue, renewables will eventually beat fossil fuel energy generation on cost without Federal subsidies. Although solar adoption may take longer now, and U.S. carbon emissions will stay higher for longer, the Trump administration will be unable to fundamentally change the energy economics of the solar industry.

On November 8th Florida voters rejected Amendment 1, a misleading solar amendment that would have essentially eliminated rooftop solar in the state. The amendment establishes a right in Florida’s constitution to own or lease solar equipment. It also ensures that consumers who do not choose to install solar are not required to subsidize the costs of backup power and electric grid access to those who do. In effect this amendment would prevent the sale of solar energy back to the grid, eliminating net-metering and dramatically altering the economics of rooftop solar. This amendment was bankrolled by major utility players and its defeat represents a huge win for the rooftop solar industry.
Gordon Algermissen

Written By

Gordon Algermissen

Gordon is an Operations Manager at Pick My Solar. Gordon graduated from Claremont McKenna College with a B.A. in Environment, Economics, and Politics. In addition to solar, Gordon has interests in water conservation, land management, and environmental policy.

More articles by Gordon Algermissen

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