The US voted on Tuesday night to return Donald Trump to the White House, and the effects were being felt in the stock market on Wednesday morning. Although not all votes have been tabulated yet, early Wednesday morning it looks very likely that the Republicans have not only won the popular vote and the Electoral College (with potentially as many as 312 electoral votes), but that they now also have a majority in the Senate check. and possibly also in the House of Representatives.
So what does this mean sustainable energy stocks?
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Nothing good, it seems, according to investors. As of 9:50 a.m. ET: Shares of solar panel maker First solar energy (NASDAQ: FSLR) have fallen by 18.9%, while solar energy supplier Sunnova Energy International (NYSE: NOVA) crashed a whopping 43%. Liquid hydrogen producer and manufacturer of hydrogen fuel cells Plug-in power supply (NASDAQ: PLUG) also suffers from 19.8% at last report.
The reasons why renewable energy investors are afraid can take several forms. Sunnova, for example, could be a big loser if new Trump tariffs on solar panels imported from China take effect and undermine their supply. Conversely, investors could normally do the same favor a company like First Solar, which does not import panels from China at all, but produces them in Ohio and Alabama. (Although First Solar also produces some panels in countries other than China, which may be affected by tariffs.)
To complicate matters further, The Wall Street Journal published a story yesterday describing “cutthroat competition” and concerns about overcapacity at China’s Longi Green Energy Technology. As ‘one of the largest manufacturers of solar energy equipment in the world’, you would expect that Longi would have at least benefited from the recent boom in solar energy demand around the world. Instead of, WJ says the company lost $740 million in the first half of this year.
Tariffs or no tariffs, even if the demand for solar energy is high, it seems difficult to make a profit in this industry. And the question might not are strong in the future – at least not in the US
Last week, Reuters reported on what energy investors should expect if Trump or Harris won Tuesday’s election, highlighting a Trump pledge to “withdraw any unspent funds” authorized by the administration’s Inflation Reduction Act -Biden. As Reuters noted, this could deprive companies like First Solar, Sunnova and Plug Power of “hundreds of billions of dollars in subsidies for electric vehicles, solar and wind energy and other clean energy technologies.”