The outcome of the US presidential election could have significant implications for global energy dynamics. However, Rystad Energy’s analysis suggests that the domestic renewable energy and cleantech sectors will continue to thrive, even in the event of a Republican victory. This trend is expected to be particularly pronounced in Republican states like Oklahoma, Iowa, Florida and Texas, where substantial investments in manufacturing and other infrastructure are driving a surge in job creation.

Rystad Energy projects that by 2030, these states will account for 57% of all US battery cell manufacturing capacity and 59% of solar PV cell and module production, as well as 95% of all hydrogen production capacity and 83% of carbon capture capacity. This underscores the transformative impact that cleantech has had on infrastructure and employment, particularly in swing states – those that are not firmly aligned with either major political party and could be won by either side in the upcoming election. The continued investment in cleantech industries highlights the economic benefits of renewable energy and underscores the impact of the 2022 Inflation Reduction Act (IRA).

“Cleantech is increasingly becoming a bipartisan success story in the US. This is underscored by our analysis, which shows the bulk of cleantech projects, from solar and batteries to hydrogen and carbon capture, are located in Republican strongholds. The tangible economic benefits are driving widespread support, ensuring that the economic momentum behind cleantech is likely to remain robust even under a potential Republican presidency. These sectors are poised to continue expanding, whether we see a red or blue outcome in November,” says Lars Nitter Havro, Head of Energy Macro Research at Rystad Energy.

Based on Donald Trump’s previous tenure, there has been speculation about his stance on cleantech development, particularly following his withdrawal of the US from the Paris Agreement on climate change. However, cleantech initiatives did not come to a grinding halt during his time in office. Many projects from the Obama administration continued under Trump, and his administration even implemented a four-year, 30% tariff on imported solar panels and modules in 2018 to protect and stimulate domestic solar manufacturing by making imported products more expensive. Notably, more onshore wind capacity was added during Trump’s term than under Biden so far, suggesting that the wind industry may be more affected by economic factors, such as interest rates, than by the political climate in the Oval Office.

If the Republican party wins the 2024 presidential election, the incoming administration will inherit the IRA and numerous pre-approved clean energy projects, making it unlikely that these initiatives would be abandoned. Despite a mixed record on cleantech, fossil fuel production during Trump's presidency was lower than current levels under Biden, and the growth of investments maintained a striking similarity, indicating a persistent momentum in US decarbonization efforts.

Assuming a Republican White House and Senate majority in 2025, we could see efforts to roll back or weaken the climate and environmental policies of the Biden administration, including the IRA. This may impact electric vehicle (EV) adoption and lead to reduced environmental regulations and streamlined permitting for fossil fuel projects. Of course, due to the nature of the legislative process in the US, if a Republican president is faced with a Democrat-controlled House of Representatives, any major repeal attempts could be blocked. However, executive actions could still enable regulatory changes, potentially slowing the momentum toward renewable energy and EV adoption.

Recent legislative proposals, such as vice-presidential candidate Senator J.D. Vance's "Drive American Act", which seeks to repeal EV tax credits and provide incentives for internal combustion engine (ICE) vehicles, are still in the early stages. However, President Trump's recent shift to a more favorable stance on EVs, influenced by Tesla CEO Elon Musk’s endorsement, suggests potential policy changes sparing some EV incentives. Additionally, the “Limit, Save, Grow Act,” aiming to reduce funding for green energy and clean projects, faces challenges in the Senate, with some provisions already removed due to internal opposition.

The chance of repealing the IRA remains low, even with a Republican Senate majority, due to concerns about competitiveness, job creation, and countering China. However, differing Republican and Democratic priorities could lead to legislative gridlock, impacting energy projects and possibly prompting states to develop varied energy policies, with some focusing on renewables and others on fossil fuels.