The U.S. presidential election is now less than a month away.
While Vice President Kamala Harris currently holds a razor-thin lead in battleground state polls, the race remains too close to call as the candidates enter the home stretch to Nov. 5.
For the renewable energy industry, the election has the potential to usher in dramatic change.
The future of fossil fuel replacement — particularly growing calls for increased investment in nuclear power — hangs in the balance. With power-intensive technologies like artificial intelligence (AI) and cryptocurrency coming under government scrutiny, the next presidential administration’s regulation of these new industries could have a significant impact on energy demand.
“The candidates have notably different positions on renewable, and the energy transition.”
Kevin Baum, Chief Investment Officer with USCF
In simple terms, a Harris victory could result in a continuation of the Biden administration’s policies promoting clean energy and climate change mitigation. A Trump return to the White House, on the other hand, would likely signal a shift toward traditional energy sources with a reduced emphasis on environmental regulation.
Politics, however, are seldom simple.
“The candidates have notably different positions on renewable, and the energy transition,” Kevin Baum, Chief Investment Officer with USCF, told Equities.com.
“That said, it’s important to note that significant renewable capacity additions have occurred under both the Trump and Biden/Harris administrations’ time in office,” Baum added.
Baum’s team at USCF manages the USCF Sustainable Commodity Strategy Fund ZSC which invests in equities as well as commodity futures. He noted that a move by Trump to curtail Biden policies could face pushback from within his own party, since a significant portion of renewable development and green energy jobs are located in red states.
Harris’s vision: A greener, regulated futur
Harris has long championed the clean energy transition. Her presidency would likely amplify this trajectory, potentially increasing funding for alternative energy projects through Department of Energy loans and preserving the Inflation Reduction Act (IRA). Such policies could buoy renewable energy companies, particularly those in solar and wind power.
On the economic front, Harris supports a higher corporate income tax rate and refundable tax credits. With the Trump-era tax breaks set to expire after 2025, her policy decisions could squeeze margins for operators in legacy energy industries like refining.
Harris’s legislative record underscores a commitment to addressing climate change through policy. She played a pivotal role in passing significant climate legislation, including casting the tie-breaking vote for the IRA in the Senate. She has sponsored and co-sponsored bills aimed at promoting renewable energy, reducing carbon emissions, and ensuring environmental justice. Initiatives like the Justice40 program and her support for the Green New Deal highlight her dedication to a fairer transition to a clean-energy economy.
Whether a President Harris would maintain the same priorities she had as a senator is unclear. Her sudden shift on fracking after accepting the presidential nomination suggests calculated political pragmatism.
The Trump mandate: Fossil fuels and deregulation
Trump proposes a markedly different path for domestic energy production.
Emphasizing energy independence, he advocates for bolstering fossil fuel exploration and development. During a recent campaign stop in Pennsylvania, he pledged to reverse several key Biden administration policies, including revoking the IRA’s climate provisions and eliminating emissions limits on fossil fuel power plants.
Notably, he also expressed support for developing small modular nuclear reactors.
Trump’s energy policy focuses on reducing regulations to facilitate increased domestic oil production. He has signaled a lighter regulatory approach for virtually all heavy industries.
Additionally, the former president has proposed a universal baseline tariff on all U.S. imports and curbing Chinese influence — moves that could reshape international trade dynamics. Such steep trade barriers could have profound implications for U.S. energy segments ranging from liquefied natural gas (LNG) to solar panel production.
During his previous tenure as president, Trump sought to roll back environmental regulations and withdraw from international climate agreements. In 2017, he announced the U.S. withdrawal from the Paris Agreement, arguing it disadvantaged the nation economically. While many of his deregulatory actions faced legal hurdles, a recent Supreme Court decision overturning the “Chevron” doctrine could ease the implementation of similar policies in a future administration.
[Video: How overturning the Chevron deference impacts markets and the EPA]
But the question remains, how sweeping would policy changes be in a Trump administration?
Wolfe Research policy analyst Tobin Marcus argued that even in the event of a GOP sweep, any Republican-led policy changes would be gradual, in order to avoid disrupting business operations for companies.
“Fiscal imperatives will demand that Republicans scale back these programs significantly over time, which probably means phasing them out gradually,” Marcus wrote in a Wolfe Research report in October.
Powering an AI-driven world
The rise of AI and the massive data centers it requires are profoundly altering America’s power demand. After nearly two decades of relatively flat power usage, projections now indicate rapid acceleration through 2030 in tandem with the AI boom.
The energy research team at UBS projects a 1.8% compound annual growth rate in power demand from 2023 to 2030, with solar energy’s share expected to increase from 12% to 27%. While 1.8% may seem modest, in an energy sector dependent on aging electrical grids, it’s monumental.
Harris has forecasted plans to regulate AI to mitigate risks and enhance transparency. Meanwhile, Trump has taken a stance of less regulation for AI and shown newfound support for cryptocurrency — a sector also notorious for massive electricity needs.
Nuclear power to the rescue?
Nuclear power has emerged as a proposed solution to meet these growing demands. It offers dispatchable, low-carbon baseload power, which is essential for grid reliability. Nuclear plants boast high-capacity factors and require less land compared to sprawling solar and wind farms. Repurposing former coal plant sites for new nuclear reactors presents an opportunity to leverage existing infrastructure and expedite the energy transition.
Critically, nuclear power enjoys bipartisan support, with both Harris and Trump favoring increased capacity.
Yet nuclear energy remains controversial. Historical accidents, waste disposal concerns, and significant cost overruns in plant construction have tainted public perception. Lengthy permitting processes and societal apprehension contribute to the industry’s challenges. A substantial shift toward nuclear power would likely require coordinated government messaging in addition to policy incentives to overcome these obstacles.
Ultimately, any decision to invest in nuclear power may come down to simple economics. According to USCF’s Baum: “When it comes to the nuclear industry, the outcome will likely be a function of lower costs, rather than the results of the election.”
Decision day
As the presidential race enters its final weeks, the stakes for the sustainable energy industry are high. The election outcome could shape the nation’s energy landscape for years to come, influencing everything from power generation to climate policy.
