“The only obvious energy shift with Trump: Clean Power Plan will not take effect,” writes energy analyst

In New York, noted Raymond James energy analyst Pavel Molchanov noted in an industry brief, “initial thoughts on how investors should think about clean tech and renewables in the wake of Donald Trump’s surprising victory.”

Molchanov wrote:

“Here we ought to distinguish between the knee-jerk reaction in many of the stocks (which is very harsh in today’s trading) and underlying industry fundamentals (a more balanced and nuanced story). At the outset, let’s underscore the fact that the vast majority of federal policies affecting various clean tech verticals are ”on autopilot” rather than changing wildly under different administrations. Furthermore, most of these policies are bipartisan and non-controversial in nature. Thus, there is no objective basis for concluding that the Trump administration will be actively hostile.

“The major exception to that is carbon emissions policy – which is not a clean tech issue in a direct sense, but, if it were to take effect, would have the potential to accelerate the adoption of renewable power in the domestic electricity mix. Thus, our message to investors in this space is not to panic, and in fact to take advantage of today’s dislocation to pick up shares of quality clean tech companies, most of whose fundamentals will not depend on the policies coming out of the Trump White House. As a reminder, our current Strong Buy-rated stocks are 8point3 Energy Partners (solar), EnerNOC (grid tech), Green Plains Partners (ethanol), and Silver Spring Networks (grid tech). Our current Outperform-rated stocks are AquaVenture Holdings (water tech), Chart Industries (LNG/natural gas fuels), Enviva Partners (biopower), SunPower (solar), and TPI Composites (wind).

The only obvious change under Trump: Clean Power Plan will not take effect. The Renewable Fuels Standard (RFS): on autopilot through at least 2022. The Investment Tax Credit (ITC) for solar and Production Tax Credit (PTC) for wind: on autopilot through at least 2020. Fuel tax credits for natural gas and biodiesel: a more immediate concern, but these are not a party-line issue.”