June 2024 IPM Monthly Blog Edition

Impact of Upcoming US Elections on Clean Energy Industry

As the 2024 US elections draw near, the clean energy industry is facing a sense of uncertainty and potential risk. The looming question of whether a Trump presidency would negatively impact clean energy in the US, particularly through the potential repeal of the Inflation Reduction Act (IRA), has investors on edge.

However, there are reasons for optimism in the face of this uncertainty. Clean energy enjoys bipartisan support in the US, and the IRA benefits red states significantly. States like Florida and Texas stand to attract over USD 300 billion in investments in solar, wind, and storage due to the IRA, making any repeal a tough sell locally.

Moreover, the IRA is not just an energy policy but also an industrial policy that supports domestic manufacturing. This feature has broad appeal across political parties, making it difficult to simply do away with the legislation.

Additionally, the US political system’s checks and balances make major changes challenging to push through. Even if Republicans were to control the presidency, Senate, and House of Representatives, the resistance from local stakeholders and the bipartisan appeal of the IRA would likely prevent a complete repeal.

Overall, the clean energy industry has shown resilience in the face of challenges in the past, and with strong demand for clean energy persisting, long-term investors can remain optimistic despite short-term political uncertainties.

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