CleanTech and the New Presidency: What to Expect

The start of President Trump’s second term in office has the CleanTech industry preparing for the future of climate change initiatives.

President Trump has historically supported the fossil fuel industry. In his initial term, this support led to many regulatory rollbacks that supported its growth and competition. This is expected to play a large part, once again, in the energy-focused initiatives of his reelection.

While the exact changes remain uncertain, examining President Trump’s previous term, as well as his presidential campaign strategy, can provide insights into the potential impact of his reelection on climate change policy.

During his first term, President Trump proposed a significant number of cuts to the Department of Energy (“DOE”) budgets and funding, focusing on the Office of Energy Efficiency and Renewable Energy and its related programs. There was also a proposal to eliminate the Advanced Research Projects Agency-Energy, which is focused on funding high-risk energy projects that could have a substantial impact on furthering the future of clean energy. Not all of these proposals were passed, partly because of the lack of support in Congress, but the DOE experienced a significant reduction in funding. For this next term, with the Republicans in control of the Presidency and Congress, these proposals could see more support. Now, the CleanTech industry must be prepared for these proposals to resurface, which could result in a further reduction of funding.

Federal incentives for CleanTech initiatives are also under scrutiny. During his initial term, President Trump attempted to eliminate several tax credits under the Inflation Reduction Act (IRA), including the Investment Tax Credit for solar energy and the Electric Vehicle Credit for individuals.

Once again, eliminating the IRA has made the presidential agenda. However, many states with Republican representation have benefited from the law and have seen economic and job growth. A number of major Republican supporters have started investing in carbon capture projects that would greatly benefit from credits under the IRA. Any removal or significant reduction in credits could have significant negative consequences on new and existing projects being considered. So, despite Republicans having a Congressional majority, a complete dismantling of the IRA seems unlikely.

The President has also directed his administration to take a close look at many energy credits put in place under the Biden administration in order to find funds to support the extension of tax cuts. This has many in the CleanTech industry feeling like they need to prepare for the extent of these upcoming clean energy cuts and begin strategizing on how to stay resilient amidst changes to come.

President Biden strongly supported the implementation of infrastructure to bolster the switch to electric vehicles and smart-grid systems.

Since taking the White House in January, President Trump has already enacted an executive order to attempt to reduce funding under the Green New Deal provisions. This order mandates that all agencies disbursing funds under the IRA and the Infrastructure Investment and Jobs Act must reassess their processes and programs for financial disbursements.This includes funds for electric vehicle charging stations. Funding has been delayed until the policy review is complete. This could result in more limited grid capacity, an area the country is already struggling with, which in turn could discourage the adoption of electric vehicles. This policy change could have an impact on red states where many companies, including automotive dealers, have invested significant sums into the manufacturing of clean energy infrastructure, and this, in turn, has created new jobs within those companies. Significant changes or the repeal of this act could affect these newly created jobs.

Overall, President Trump’s reelection has caused a meaningful amount of uncertainty in the CleanTech industry. Many companies working to slow or reverse climate change rely on these policies to support growth and development and encourage the widespread adoption of their products. With the focus of the new administration elsewhere, the CleanTech industry is facing a new wave of challenges.