President-elect Donald Trump’s pick to lead the U.S. Department of Energy, Chris Wright, embodies the all-of-the-above philosophy for American energy development often touted by fossil fuel company leaders to promote oil and gas production alongside renewable energy expansion.
Wright, the CEO of Colorado-based oilfield services company Liberty Energy Inc. (ticker: LBRT), like Trump himself, is an unabashed supporter of the fossil fuel industry. But he is also open to renewable sources of power generation, mirroring what many industry executives believe will be the path of global energy infrastructure development well into the middle of this century.
“I am all in on energy from my start in nuclear, solar, and geothermal to my current efforts in oil and gas and next generation geothermal,” Wright says on his LinkedIn page. “I don’t care where energy comes from, as long as it is secure, reliable, affordable and betters human lives.”
People concerned with increasing intensity of natural disasters as the planet warms because of human-caused greenhouse gas emissions from fossil fuels have decried the pick of Wright as energy secretary. But it appears that renewable energy development will continue even as the Trump administration favors drilling for more oil and natural gas.
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In the U.S., the Energy Information Administration expects solar generation capacity to grow by at least 325% from 2022 to 2050 and wind generation capacity to increase by at least 138%. Globally, renewable energy sources — including hydropower, wind and solar — will account for more than 42% of electricity generation in 2028, according to the International Energy Agency.
While the Trump administration may roll back incentives for electric vehicles and do away with unspent money for green initiatives in the Inflation Reduction Act (IRA), his administration is unlikely to completely curtail the growth of renewable energy, mainly because Republican congressional districts have benefitted the most from IRA clean energy projects.
“Solar provides energy security in key red states, where extreme weather challenges are increasing, making solar and battery storage an important part of energy security,” says Wilson Chang, CEO of Sunrock Distributed Generation.
With the continued expansion of renewable energy sources all but guaranteed — even if Trump follows through on his campaign promise to “drill, baby, drill” for oil and natural gas — here’s a look at seven renewable energy stocks that stand to benefit:
— Enphase Energy Inc. (ENPH)
— First Solar Inc. (FSLR)
— NextEra Energy Inc. (NEE)
— Brookfield Renewable Corp. (BEPC)
— Fluence Energy Inc. (FLNC)
— Nexans SA (OTC: NEXNY)
— HA Sustainable Infrastructure Capital Inc. (HASI)
Enphase Energy Inc. (ENPH)
Enphase Energy designs, develops, manufactures and sells micro-inverter systems for the solar industry. These devices convert direct current power produced by solar panels to alternating current used by household appliances.
Companies that make these devices are key to solar energy expansion, and Enphase has a global footprint, which is important given uncertainty around subsidies in certain jurisdictions.
“The Trump administration’s energy policies will look very different from the Biden administration’s,” says Chang. “While there will be cosmetic changes to certain elements of the IRA, the core focus on supporting domestic manufacturing and more energy build-out will remain.”
First Solar Inc. (FSLR)
This company has benefited as solar installations in the U.S. have become more prevalent.
First Solar uses cadmium telluride technology for its solar cells in a process that has a smaller carbon footprint than other manufacturers that use polysilicon. Additionally, First Solar doesn’t rely on Xinjiang, a polysilicon-producing region in China where the U.S., Canada and the U.K. say Uyghur Muslim minorities are forced to work against their will in conditions that amount to genocide.
“First Solar is a $20 billion market capitalization American solar manufacturer, and U.S. companies are some of the best in the world at R&D innovation,” Chang says. “By investing in local production of panels and other energy and battery storage components, the U.S. can reduce its dependence on overseas suppliers and mitigate supply chain disruptions that may come from potential new tariffs and trade disputes.”
NextEra Energy Inc. (NEE)
NextEra, which often makes lists of top renewable energy companies, has a regulated utility segment that generates, transmits, distributes and sells electricity in Florida. Another segment produces electricity from renewable sources, including wind and solar. The company is also involved with green hydrogen, battery storage and nuclear plants.
As a utility, NextEra can fit into portfolios in a defensive capacity. While it likely won’t outperform growth stocks in the tech sector, for example, it also may not decline as much when the market turns sour because people need electricity in any economic environment.
The company stands to grow as demand for data centers increases, and in the third quarter, for the second quarter in a row, NextEra added 3,000 megawatts of new renewables and storage projects to its backlog of work.
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Brookfield Renewable Corp. (BEPC)
Investors looking to combine income with the potential for long-term growth should consider Brookfield Renewable Corp.
Brookfield owns and operates a wide variety of renewable energy projects, including hydro, wind and solar. That diversity can prove useful as a hedge when one part of the renewable energy market is doing better than another.
The firm has more than $1 trillion in assets under management and operates on five continents, giving it jurisdictional diversification that can add stability to a natural resources company.
For example, while the U.S. is tilting toward more oil and gas, Europe is more focused on renewable energy.
Fluence Energy Inc. (FLNC)
Battery storage is a key part of the decarbonized economy. Because solar and wind generation are intermittent based on when the sun is shining and the wind is blowing, energy storage systems offer a way to help stabilize electric grids.
Fluence, an energy storage products and services company, has a presence in 47 markets globally and is a joint venture between German multinational technology conglomerate Siemens AG (OTC: SIEGY) and American utility AES Corp. (AES).
Those companies provide an amount of stability in an industry where there are plenty of startups that might have great ideas but could struggle to get funding.
Nexans SA (OTC: NEXNY)
Another thing the energy transition will need in great quantities — besides batteries — is wiring that connects distributed solar, wind and other renewable energy sources to the grid and then to homes and businesses.
Wiring connections are also needed within renewable energy installations — especially offshore wind farms that will power coastal metropolitan areas and take miles of cable to connect individual wind turbines with substations at sea.
As a cable products company, Nexans provides infrastructure to connect offshore wind farms with the grids that transfer the electricity to homes and businesses on land. It is also involved in the onshore wind and solar industries and develops cabling solutions for electric vehicle charging stations, which will be in increased demand as more people adopt electric transportation.
HA Sustainable Infrastructure Capital Inc. (HASI)
The Inflation Reduction Act has supercharged renewable energy companies domestically as well as those abroad that can meet certain U.S.-centric criteria.
This U.S. company — which provides capital to companies involved in energy efficiency, renewable energy?and other sustainable infrastructure markets — is one of the beneficiaries of the legislation.
While the IRA may change under Trump, it isn’t likely to completely go away.
HASI’s portfolio includes behind-the-meter energy efficiency; distributed solar and storage investments; grid-connected wind, solar and storage projects; fleet decarbonization; and ecological restoration.
The company says it is the first U.S. public company solely focused on climate solution investments.
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7 Best Renewable Energy Stocks to Buy Now originally appeared on usnews.com
Update 11/22/24: This story was previously published at an earlier date and has been updated with new information.
