How Will a Clinton or Trump White House Affect Renewable Energy? – U.S. News & World Report

August 25, 2016 Facebook Twitter LinkedIn Google+ Uncategorized

Renewable energy has made significant inroads into the U.S. energy system and even in the era of low fossil fuel prices, costs for solar and wind installations are down dramatically.

According to the Solar Energy Industries Association, the solar industry trade group, costs to install solar panels fell by more than 70 percent over the last 10 years and during that time, solar saw a compounded annual growth rate of nearly 60 percent. The trade organization for the wind energy industry, the American Wind Energy Association, said costs are down more than 90 percent since the early 1980s.

Federal tax policy and renewable energy mandates from various states spurred much of the rapid development. With a new presidential administration set to take office in 2017, how much further federal renewable energy policy may expand, or if it may contract, could be determined by whether Hillary Clinton or Donald Trump is elected.

“The development of alternative energy technology (is) a topic of great disparity in political platforms between the Democratic and Republican candidates,” says Stewart Glickman, group head for energy equity research for S&P Global Market Intelligence in New York.

Their policies could also boost certain publicly traded companies, market analysts and investment managers say.

If Hillary Clinton wins. “Clinton has clearly spelled out an affinity for alternative energy in her campaign materials,” Glickman says.

On her campaign website, Clinton states a goal to: “generate enough renewable energy to power every home in America, with half a billion solar panels installed by the end of Hillary’s first term.”

Glickman says that’s an ambitious plan. Using SEIA data, S&P Global Market Intelligence estimates about 25,000 to 30,000 megawatts of solar capacity were installed in the U.S. up until 2015.

“At an assumed 4,000 solar panels per megawatt, we think this implies 100 million to 120 million solar panels installed cumulatively,” he says. “Over just a single four-year presidency, the compound annual growth rate would have to be more like 45 percent.”

That growth is possible but contingent on the continued extension of the Investment Tax Credit, which is now slated to expire in 2021, he says.

Garvin Jabusch, co-founder and chief investment officer of Green Alpha Advisors in Boulder, Colorado, who specializes in green investing, says Clinton’s goal is very aggressive, even beyond the traditional Democratic platform.

He says aside from solar panels, her election platform calls for a price on methane, which is more harmful to the environment than carbon-dioxide emissions, and to close the loophole that exempts hydraulic fracking from the Clean Water Act, which will likely increase natural gas costs.

“These things are all a big deal, and it’s quite a bit further than I expected her to go,” Jabusch says. “But it’s very encouraging and if they come anywhere near these goals, it’s incredibly bullish for renewable energy and electric transportation.”

Both Glickman and Jabusch said two U.S. solar-panel manufacturers, First Solar (ticker: FSLR) and SunPower Corp. (SPWR), would benefit if Clinton’s platform is realized.

“It would require all the production capacity of every American solar manufacturer running flat out,” Jabusch says. “I don’t have to tell you this, but it would be incredibly good for the stock.”

If Donald Trump wins. Trump and the Republican platform have a much greater tilt toward fossil-fuel energy production, including coal production and canceling the Paris Climate Agreement, which calls to limit global warming. The GOP platform also states: “government should not play favorites among energy producers.”

Glickman says his firm interprets these comments to mean that the solar tax credit would be either reduced or eliminated. S&P estimates that a steep reduction in the ITC, such as scaling back to 10 percent from the current 30 percent, could cause solar installation demand to drop 60 percent because of solar energy’s high upfront fixed costs.

“If you’re in a business where all of a sudden demand falls off 60 percent very quickly, I can’t imagine a business that wouldn’t be affected by that,” Glickman says.

Jabusch says renewables may temporarily struggle under a Trump administration.

“It’s not a death knell because their (renewables) economic competitiveness is so strong now that it’s almost impossible to put that genie back in the bottle, but they sure as hell can slow it down,” he says.

Mike Ciccarelli, commodity and stock trader at Chicago-based, says considering Trump and Clinton are at the opposite spectrum on policy, their wins could make energy stocks move.

“They’re both hard core enough that what they’re favoring could see really big moves,” he says.

Glickman and Ciccarelli said the oil super-major companies could benefit from a Trump win, such as Chevron Corp. (CVX) and Exxon Mobil Corp. (XOM).

Although the GOP platform calls coal “an abundant, clean, affordable, reliable domestic energy resource,” Glickman says because under the Obama Administration so much regulation has been signed to limit use of coal, coal-producing companies like Peabody Energy Corp. are unlikely to benefit.

“I think you would have to get new legislation to pass the House and the Senate to undo that. I’m not sure is something that would happen quickly. I’d think you’d have to see more shoes drop before you can get there.” Glickman says.

Ciccarelli says for investors looking at coal stocks they may be better off looking a firm like SunCoke Energy (SXC), suppliers of coaking and metallurgical coal that’s used in steel production rather than for power generation.

Glickman and Jabusch say the gains in the renewable industry have advanced so far that federal policy may begin to take a back seat.

“We think alternative energy could eventually reach a point where it can stand on equal footing with fossil fuels, but probably not during the next presidency, regardless of which candidate takes office in January 2017,” Glickman says.

Abe Silverman, in-house counsel at power producer NRG Energy, said individual states have been more proactive on increasing renewable energy use.

“When you talk to consumers, individual people and companies, they are really interested in sustainability. Will it continue? Absolutely. I don’t think this is a genie you can put back in the bottle,” he says. “The question is what is the speed of adoption and what kind of policies are we putting into place that will happen faster or slower, and also, cheaper or more expensive.”

An income investor’s best friend

A man holds an hourglass in his hands to represent time management.


Yield is tough to find nowadays. Investors saving for retirement can’t count on fixed income to provide much of a cash flow, and that makes the never-ending hunt for the best dividend stocks all the more urgent. Clearly, there is no objective list of the “best” dividend stocks in the market, but that doesn’t mean there aren’t straightforward metrics pointing investors in the right direction. Surely a great dividend stock must be consistent, and there’s no better sign of consistency than a company that’s been paying dividends for the last 100 years. Through thick and thin and peace and war, the following 10 stocks have done just that.

Exxon Mobil Corp. (ticker: XOM)

Exxon Mobil Corp. (ticker: XOM)

An Exxon gas station advertises its gas prices on February 1, 2008 in Burbank, California.

(Getty Images)

The year is 1882. Thomas Edison’s lightbulb is three years old, Chester Arthur is president, and what is now known as XOM begins its absurdly long streak of shelling out dividends. Investors can be justifiably concerned that low oil and natural gas prices will keep pressure on XOM shares, but the company’s immense size and asset base make Exxon Mobil the perfect investment for the preservation of capital and a slow but steady income. The firm’s elite dividend tradition is all the more legendary when you consider its recent habit of increasing its dividend yearly, too. That’s been an annual ritual since 1983.

Coca-Cola Co. (KO)

Coca-Cola Co. (KO)


The world’s largest beverage company has also been paying a dividend since the 19th century – 1893, to be exact. Before the invention of the airplane, Coca-Cola had begun paying dividends for investors, and that’s unlikely to change anytime soon. Like Exxon, Coca-Cola has also been regularly upping the size of its payments – in fact, Coke’s history of dividend increases is even more impressive than Exxon’s. The Atlanta-based soda giant has been boosting its dividend annually since the Kennedy administration; you’d have to go all the way back to 1962 to find a year Coca-Cola didn’t increase its payout.

Consolidated Edison (ED)

Consolidated Edison (ED)

Technicians with Con Edison work on restoring power along Skillman Avenue July 24, 2006 in the Queens borough of New York City.

(Getty Images)

There are only a handful of rock-solid dividend stocks in the world. But among the proud few, it doesn’t get much more reliable than Consolidated Edison. Conservative investors just looking for a steady stream of income – without the higher risks associated with the potential for greater capital appreciation – need look no further than ConEd. The electric and gas utility company will exist as long as its primary market, New York City, does. The Big Apple has been feeding ED stock owners the cash flow needed for regular dividends since 1885, when the company first started paying out.

3M Co. (MMM)

A view of the exterior of the new Dutch head office of international technology company 3M in Delft, seen on November 5, 2014.

9Getty Images)

Diversified industrial conglomerate 3M can’t match ConEd or Coca-Cola’s streak of uninterrupted dividends – it’s only been dishing out consistent dividends for 100 years, having paid its first one in 1916. If you’re wondering how 3M has been able to churn out cash payments for shareholders religiously since the middle of World War I, the answer has a lot to do with the company’s innovation-focused philosophy. 3M allots employees 15 percent of their work week to create and research things entirely unrelated to their job. It also aims to regularly generate 30 percent of its revenue from products created in the last four years, making the company adaptive and unique.

Procter & Gamble Co. (PG)

Procter & Gamble Co. (PG)

Tide laundry detergent, made by Procter & Gamble Co., is seen on display at the Arguello Supermarket January 28, 2005 in San Francisco.

(Getty Images)

Procter & Gamble products are virtually unavoidable; the consumer goods giant has dozens of billion-dollar brands ranging from grooming and personal care products to health care and beauty-focused products. Its unrivaled brand portfolio is a who’s-who of household names: Charmin, Downy, Febreze, Crest, Gillette and Head & Shoulders are just a few of its wildly recognizable brand names. P&G’s knack for creating brand awareness has earned it prominent shelf space in retailers throughout the globe, and is the driving force behind its 125-year dividend streak. And, like most elite dividend stocks, PG has consistently raised its dividend payments for decades – since 1957, to be exact.

Stanley Black & Decker (SWK)

Stanley Black & Decker (SWK)

A box containing a Black & Decker tool is seen with a Stanley tool at Shell Lumber and Hardware on November 3, 2009 in Miami, Florida.

(Getty Images)

Tool and machinery powerhouse Stanley Black & Decker is quietly one of the most consistent dividend stocks on Wall Street, and it’s not afraid to let its investors know. Its investor relations website boasts that SWK has paid annual dividends for longer than any other industrial company on the New York Stock Exchange. When you’ve paid dividends since 1877, that’s not hard to believe. SWK has also been upping its dividend every year for almost five decades, and remarkably still has a very low payout ratio, signaling the company could dramatically raise its dividend tomorrow and still have plenty of profit left to be held or reinvested.

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