Shares of several renewable energy companies traded lower on Wednesday after Donald Trump was declared the winner of the presidential election, affording him a second term in the White House.
Solar companies were hit particularly hard, with Enphase Energy plummeting more than 18% and First Solar dropping more than 12%. Brookfield Renewable Partners was down over 8%.
Shares in European clean energy groups tumbled Wednesday, too. The world's largest offshore wind developer, Orsted, fell as much as 14%, while wind turbine makers Vestas and Nordex traded down around 11% and 7.6%, respectively.
Meanwhile, the Dow Jones Industrial Average, S&P 500 and Nasdaq Composite all soared to new intraday highs Wednesday morning.
Trump's decisive victory over Vice President Kamala Harris was a blow to the green agenda of the Biden-Harris administration, which significantly ramped up government spending on clean energy alternatives.
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Biden's signature Inflation Reduction Act (IRA) of 2022 invested $369 billion in what Democrats labeled "Energy Security and Climate Change" provisions, translating to billions of dollars of incentives and tax breaks intended to reduce carbon emissions 40% by 2030.
Trump, on the other hand, has promised to "drill, baby, drill," embracing America's fossil fuel industry. The president-elect has vowed to scrap offshore wind projects through an executive order on his first day in office and to roll back the climate regulations implemented under Biden.
Following Trump's victory, Deutsche Bank wrote in a note to clients, "A full repeal of the IRA would depend on Congress, although significant changes might be possible."
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Price Futures Group senior market analyst and FOX Business contributor Phil Flynn also suggested in his daily energy report Wednesday morning that Trump will bring major changes to the energy landscape, and blasted Biden's policies.
"President Trump will reverse many of Biden’s short sighted executive orders on energy that helped fuel inflation and caused much concern against the producers of U.S. oil and gas," Flynn wrote. "Biden’s policies have been an abject failure on improving the environment. We’ve seen billions of dollars of wasted government spending and yet we have seen the failure of the administration to make any real gains on their climate pledges."
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Flynn added, "And while the outlook for US oil and gas is now going to be great again, we still must face a potential supply squeeze that is coming in part because of the Biden administration discouragement in oil and gas projects."
Reuters contributed to this report.
