As President Joe Biden begins his first term in office, one of his administration's top concerns will be ramping up green energy initiatives. And the renewable energy industry, from offshore wind to electric vehicles, is getting ready for a White House that’s more open to them.
Renewable energy is already a massive industry — by 2025, it’s estimated that the sector will be worth over $1.5 trillion globally. Companies like NextEra, Albemarle, and Vineyard Wind have already grown significantly in recent years. And since Biden became president-elect, renewable energy stocks have soared.
Under President Trump, renewable energy took a backseat in favor of the fossil fuel industry. According to Trump, renewable energy was too expensive and bad for the country’s existing factories, despite the fact that oil and gas giants have been moving towards renewable energy for years in a bid to diversify in the growing market.
The Biden administration, meanwhile, has big plans for renewable energy. In a $2 trillion proposal, Biden wants electricity to go carbon-free by 2035, and for the country to get to net-zero emissions by 2050. Experts predict a handful of strategies Biden will use: cutting back on coal use, phasing out old utility plants, and expanding wind and solar power.
Arguably the country’s biggest renewable energy giant, NextEra Energy, is primed for the Biden administration. The century-old company took an early stake in wind power and managed to grow its profits under Trump, making it the biggest investor-owned generator of wind and solar power. In October, NextEra briefly surpassed the biggest energy company, Exxon Mobil, in market capitalization.
One of NextEra’s growth strategies relies on taking advantage of federal tax credits — it’s amassed $3.1 billion since 2010. Under President Biden, those federal incentives are likely to expand. NextEra plans to continue its path to dominance in wind and solar energy through lobbying, a strategy that worked wonders under Trump. In 2019 alone, it spent $4.1 million on lobbying federal lawmakers, according to Bloomberg. With the new administration and democrats in control of both houses of Congress, NextEra may not need to work so hard to persuade lawmakers to advocate for green energy.
NextEra's job listings have been steadily increasing since June last year, with 290 current openings. After the pandemic, listings took a tumble, but they've since bounced back, showing a 36% increase in listings year-over-year.
NextEra isn’t the only wind company to benefit — the entire wind energy industry, which is made up of some 120,000 workers, is set to grow dramatically under Biden. The American Wind Energy Association congratulated Biden for his victory in a statement, saying that it looks forward to growing the US economy while combating climate change.
Offshore wind, a nascent sector long ridiculed by Trump for its wind turbines allegedly killing birds, will likely see a huge expansion. The Biden administration plans to install tens of thousands of wind turbines across the country. An 800 megawatt offshore wind project led by Vineyard Wind has been delayed by the Trump administration for months, according to the Financial Times. Now, with a renewable-friendly president, the $3 billion project is expected to go through, and Vineyard Wind has stated that it could deliver power by 2023.
The electric vehicle industry is also expected to grow in the coming years. Albemarle, the world’s largest maker of lithium for batteries used in EVs, announced this month that it would double battery production in its Nevada plant by 2025, according to Reuters. The company plans to invest between $30 million and $50 million in the expansion, a move analysts say could have been influenced by Biden’s victory.
Albemarle's job listings count has been steadily increasing since the onset of the pandemic, with 144 current openings. The company's stock shot up ever since Biden's path to president-elect was clear. Its current stock price, hovering around $180, shows a 130% increase year-over-year.
Renewable energy companies aren’t the only ones gearing up for a greener White House — investors are rushing to put money into renewable energy. According to Lipper data via Reuters, alternative energy funds investing in wind, solar, and water saw an inflow of $5.2 billion in the first half of January. That’s a huge increase compared to their 2020 total of $17.1 billion. Funds like iShares Global Clean Energy ETF and Invesco Solar ETF have seen the biggest increases.
Despite operating under an administration that didn’t prioritize renewable energy, companies in the sector have managed to thrive. With a new government on their side, the sector could see growth like never before.