While the broad market rallied on Wednesday, a number of renewable energy companies retreated on concern that a Republican-controlled Senate is unlikely to pursue pro-climate policies.
First Solar, a manufacturer of solar panels, dropped 7%, while home solar provider SunPower fell more than 5%. SunRun, another provider of residential solar, dropped about 1%, and fuel cell maker Plug Power slipped 3.3%.
All have outperformed the broader market this year, with the solar power companies in particular gaining momentum in recent months as the polls swung in favor of Joe Biden in the presidential race and Democratic Senate candidates. Election results from Tuesday’s contest have yet to be called in a number of key states, but the path for Democrats flipping the Senate has almost disappeared.
Biden made climate change one of the central issues of his campaign and provided a clear contrast to the Trump administration, which has unwound numerous energy regulations and withdrew from the Paris Agreement that was signed while Barack Obama was president. Last year, Biden introduced a $ 1.7 trillion plan for clean energy research and infrastructure overhauls that would be financed by rolling back Republican tax cuts.
On his website, Biden says the Green New Deal, a a set of goals established by Democrats in Congress, provides a “crucial framework for meeting the climate challenges we face.” Broadly, supporters of the Green New Deal aim to transform the U.S. energy and transportation industries, driving down greenhouse-gas emissions to zero and transitioning to renewable power sources.
Legislation backed by Sen. Bernie Sanders (I-Vt.) and Representative Alexandria Ocasio-Cortez (D-N.Y.) would retrofit 1 million units of federally owned housing and fund solar panels and other renewable energy sources for public housing. Sen. Elizabeth Warren (D-Mass.) is another proponent.
To make progress on legislative action, Democrats likely need control of the White House as well as both chambers of Congress. Democrats will keep their House majority, NBC News projected Tuesday night, but the presidential race remains close and the Democrats were unsuccessful in winning several Senate seats where they were favored.
Not all solar executives are supporters of the Green New Deal because of the political challenges involved. SunPower CEO Tom Werner told Reuters last year that, “If you just broadly endorse the Green New Deal, you are liable to upset one side of the aisle or the other.”
Renewable energy companies were clear laggards on Wednesday, as the Dow Jones Industrial Average jumped 2.1%, the S&P 500 climbed 2.7% and the Nasdaq Composite rose 3.9%. The biggest tech companies all rose, led by Facebook’s 8.2% increase, on optimism that gridlock in Washington will hamper efforts to regulate the industry.