Green Investors Find a Silver Lining in Trump’s Presidency

Shares in clean energy companies have fallen every year since 2021, but some say the sector has hit bottom.

And Garvin Jabusch, investment chief at Green Alpha Investments, a Colorado firm that manages about $300 million, says he expects clean energy companies to thrive this year—just not in the US. While Trump’s potential policies remain too unpredictable to encourage investment in the American market, China’s strong support for green technologies make that country’s solar and EV makers a far better bet. Even if Trump’s proposed tariffs force them to scale back their US business, Jabusch says, “they can always sell to the other 80% of global GDP.”

Garvin Jabusch’s quote from the end of the article is shown above. The full article by Saijel Kishan is included below. January 23, 2025


The last time Donald Trump was in the White House, ultra-low interest rates helped green stocks quadruple in value, with a particularly strong surge after Joe Biden won the 2020 election. Jubilant investors rightly expected the incoming president, a champion of clean energy, to enact a raft of climate-friendly policies, lifting the industry to new heights. But around the time Biden took the oath of office in January 2021 the euphoria subsided, and shares of companies in the sector fell throughout his presidency.

Now, even as Trump has abandoned the global pact on reducing greenhouse gas emissions and is seeking to boost production of fossil fuels, some in the business are increasingly optimistic about the industry’s prospects. Low valuations and an improving earnings outlook, they say, provide a glimmer of hope. “We believe we are close to a turning point,” says Mark Lacey, a money manager at Schroders Plc.

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Joe Biden in 2021 at the National Renewable Energy Laboratory in Colorado. Photographer: Helen H. Richardson/Getty Images

While climate advocates focus on rising global temperatures, a far more pertinent indicator for green investing is US interest rates, which last year hit their highest level in almost a quarter century. That made it more costly for green companies to get financing, homeowners to buy solar panels and drivers to purchase EVs. Although rates have declined modestly, economists now expect the pace of reductions to slow this year with inflation remaining above the Federal Reserve’s target and jobs data beating expectations.

Despite the initial burst of enthusiasm for stocks with green cred under Biden, the industry was hammered by pandemic lockdowns that snarled supply chains and increased inflation, which triggered the rise in interest rates. Wind energy projects were shelved and sales of electric vehicles slowed, while Russia’s war in Ukraine and rising demand for energy-sucking artificial intelligence bolstered the case for fossil fuels.

The S&P Global Clean Energy Index has dropped by almost two-thirds since its January 2021 peak. BlackRock Inc. in December announced “significant markdowns” to a green fund that had raised $4.8 billion, after bets on an electric-vehicle-battery maker and a solar business went awry. And more than a dozen other such funds in the US shut down, according to researcher Morningstar Direct. “The last few years have been relentless for clean energy stocks,” says Chandni Chellappa, a researcher at Marathon Capital in Chicago.

Some analysts even find a silver lining in the new administration’s aim of eliminating government support for green energy, which GOP politicians deride as corporate coddling. While incentives can help fledgling technologies get off the ground, a Trumpian removal of such measures—regardless of the intention—could ultimately strengthen the industry, according to Seth Kirkham, who runs global equities at Galvanize Climate Solutions, a San Francisco investment firm with more than $1 billion in assets. Backing of EV makers, which Trump opposes, reduces the pressure to create profitable businesses. “You’ve got to get the industry off subsidies,” Kirkham says.

Yet there’s no shortage of voices pessimistic about Trump’s return to the White House. While his proposals to ease regulations may, for instance, hasten permitting for some green projects, he’s a voracious proponent of fossil fuels who’s pledged to eviscerate Biden’s signature climate law, the incongruously named Inflation Reduction Act. Trump’s proposed tariffs risk boosting costs for green energy projects that use imported supplies. And on his first day in office he barred any new construction of offshore wind projects, proposed eliminating EV incentives, and reversed Biden’s decision to rejoin the Paris climate pact (which Trump had pulled out of during his first term).

Green technologies, meanwhile, continue to suffer from the same pernicious mix of high interest rates, supply chain issues and an ill-prepared US electric grid, according to analysts at investment bank Jefferies Financial Group. “We perceive another challenging year ahead for the clean energy sector,” Jefferies wrote in a Jan. 9 report. “It’s hard to be too positive.”

Some in the investment community are selectively bullish, saying certain green sectors might thrive even as others founder. Izzet Bensusan of Captona, a New York firm that manages $2 billion, says battery producers should prosper as more electric grids install them to manage loads and store power when solar or wind installations are idle. But he’s steering clear of less developed areas, such as using renewable energy to split hydrogen from the oxygen atoms in water. “It’s not there yet, cost-wise, technology-wise,” he says.

And Garvin Jabusch, investment chief at Green Alpha Investments, a Colorado firm that manages about $300 million, says he expects clean energy companies to thrive this year—just not in the US. While Trump’s potential policies remain too unpredictable to encourage investment in the American market, China’s strong support for green technologies make that country’s solar and EV makers a far better bet. Even if Trump’s proposed tariffs force them to scale back their US business, Jabusch says, “they can always sell to the other 80% of global GDP.”

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