Clean Energy Attracts Buyers Ahead of Elections

  • Renewable energy stocks, ETFs get a boost from 2020 presidential election
  • Joe Biden proposes $2 trillion plan to transition to clean energy economy
  • Utility firm NextEra briefly tops ExxonMobil in market value on Friday

Overshadowed by political and other developments this month was a big milestone for renewable energy. NextEra, the world's largest solar and wind power generator, briefly unseated the over-a-century-old giant ExxonMobil as the biggest energy or utility company by market capitalization during intraday trading. Shares in the Florida-based utility firm with 14,000 employees and less than $20 billion in revenue last year have soared around 18% so far in 2020.

Clean energy ETFs and stocks have been climbing in the run up to the U.S. election as investors start to make bets on whom they believe will enter the White House and if Democrats will take the Senate. The two presidential candidates couldn't be further apart on energy policy with Biden adopting Green New Deal principles to draw supporters of candidates like Bernie Sanders and Elizabeth Warren. The recent rise in green stocks signal that some of Wall Street is preparing for shifts toward sustainability in the future. Although the renewable energy industry isn't unscathed during the pandemic – projects have been delayed etc. – the plunge in oil and coal demand has been much more impactful on corporations and their stocks.

renewable energy stocks
Source: YCharts.

Biden's aggressive climate proposal is worth $2 trillion spread over four years and aims to put the U.S. on the path to achieve a 100% clean energy economy with net-zero emissions no later than 2050. He says it will be paid for by reversing "the excesses" of the Trump tax cuts for corporations and ending subsidies for fossil fuels among other things. Here's some of what's in it:

  • Rejoin the Paris Climate Agreement and make climate change part of foreign policy, trade negotiations
  • A carbon pollution-free power sector by 2035
  • Upgrade and modernize U.S. buildings and infrastructure
  • Zero-emissions public transportation options for all cities by 2030
  • $400 billion investment in climate innovation and research
  • Tax incentives/credits
  • 500,000 new EV public charging outlets and use federal procurement to increase demand for American-made, American-sourced clean vehicles
  • No ban on fracking
  • Methane pollution limits
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