Solar, wind and utility-scale battery projects are expected to keep growing regardless of the next administration’s “drill baby drill” obsession for a simple reason: they’re cheaper.

_{By Alan Ohnsman, Forbes Staff}

President-elect Donald Trump pulled the U.S. out of the Paris Climate Accords in 2017, slowing global efforts to fight a climate crisis he’s called a hoax, and has repeatedly promised to “drill baby drill” when he returns to office, claiming more production of planet-warming oil and gas will solve persistent inflation woes.

But don’t count out the clean power industry just yet. Billionaire investor Tom Steyer is betting that renewable power and the cleantech sector are going to be just fine, regardless of Trump’s fixation on hydrocarbons.

“Texas has tripled their solar in the last three years and is by far the biggest wind producer. Are they doing it because they like renewables or because they like money?”

And he plans to continue to use the $1 billion his firm Galvanize Climate Solutions has raised and future investments to back companies with advantages in areas like cost-competitive low-carbon cement, ag technology that helps farmers improve efficiency and sustainability, energy management software as well as cheap, continuous geothermal power from companies like Fervo Energy.

“Texas has tripled their solar in the last three years and is by far the biggest wind producer. Are they doing it because they like renewables or because they like money? I think it might be because they like money. And so does everybody else,” Steyer told Forbes. “People are making decisions for cheaper, faster, better. That’s the decision, not politics.”

Nearly a quarter of U.S. electricity now comes from renewables. Rapid growth that’s accelerated under the Biden administration has limited – if not significantly reduced – the country’s carbon emissions in the past few years, even as it consumes ever more power. While Trump’s next administration will prioritize greater production of natural gas for power plants, utilities are already adding as much new wind, solar power and, increasingly, large-scale battery storage, as they can just to keep up with demand, which is expected to rise at least 10% by 2030. That’s been compounded by the rise of power-guzzling data centers for artificial intelligence platforms and cryptocurrencies, ensuring that every source of electricity, including renewables and next-generation nuclear, will remain in the mix.

Along with the urgency to slow carbon buildup, cleantech has become a massive business opportunity. U.S. investment in clean energy is expected to reach a record $300 billion this year, according to the International Energy Agency (IEA). That’s 1.6 times the level of 2020, the final year of Trump’s first term. It’s even outpacing investment in oil and gas, production of which is currently at a record high. Still, the country trails clean energy spending in the European Union, which the IEA expects to reach $370 billion, or China, which will likely spend $680 billion to maintain its lead in production of solar cells, lithium batteries, electric vehicles and wind turbines.

“Most Americans think fossil fuels are cheaper as an electricity source than solar and wind. And that’s not true.”

Steyer, a career fund manager and former Democratic presidential candidate with a net worth Forbes estimates at $2 billion, said his firm, which recently added former Secretary of State and Special Presidential Climate Envoy John Kerry, has avoided making bets based on policy, such as those impacted by Biden’s Inflation Reduction Act (IRA), the biggest federal investment in clean energy. Instead, he evaluates companies based on their ability to do things cheaper and more efficiently – and that are better for the climate like Fervo’s geothermal plants.

“Most Americans think fossil fuels are cheaper as an electricity source than solar and wind. And that’s not true. In fact, solar and wind are cheaper now and getting even cheaper,” Steyer said. “So you’re talking about competing against that. You can’t make oil or natural gas more efficient. It just is what it is. And these technology-driven sectors are doing what you expect technology-driven sectors to do, which is continue to move down the cost curve and continue to move up in efficiency rates.”

Galvanize, founded in 2021, also buys shares of global climate-oriented companies and invests in sustainable real estate projects, Steyer said. “We’re buying buildings and getting them to net zero and making more money doing it. We’re never concessionary. We believe everything we do, this is a tailwind to make higher returns.”

Other cleantech investors are similarly confident about the continued need for clean power but are bracing for uncertainty under a Trump administration – for good reason. This week he tapped Republican Representative Lee Zeldin to serve as administrator for the Environmental Protection Agency, a worrisome development for environmental organizations. In his first Fox News interview, Zeldin appeared to suggest that an agency tasked with keeping the country’s air, water and soil clean would help facilitate Trump’s oil and drilling plans. “We will restore American energy dominance, revitalize our auto industry to bring back American jobs, make the United States the global leader of Artificial Intelligence advancement, and slash the red tape holding back American workers from upward economic mobility,” Zeldin said.

Still, even ExxonMobil, the biggest U.S. oil company and a top carbon polluter doesn’t want Trump to pull the country out of the Paris Accords again as that would create problems for strategic moves it’s made that include investing billions of dollars in low-carbon hydrogen production and carbon capture operations.

“I don’t think a lot of the energy legislation is actually at risk of being repealed.” 

“Nobody knows what Trump is actually going to do. There are only suspicions,” said an investor who leads a multibillion U.S. cleantech fund who asked not to be named so he could speak freely. “What is absolutely clear is that energy demand, the demand for the clean electron, is going to go up a lot in this country.”

That’s largely because of data center demand, as well as from manufacturing and EV charging. But because of permitting issues and the time needed to get new clean energy projects connected to the grid, natural gas will be a big winner. “The data center people will be pragmatic and make compromises. The first big winner out of that is natural gas,” the investor said. “Nuclear is probably in the same bucket, but it’s not a near-term solution.”

Trump will be practical in his own ways. It’s unlikely he would repeal the Energy Act of 2020, the final bill he signed in his first term, which had tougher rules for hydrofluorocarbons and provided funds for renewable energy and carbon capture. “There’s actually more bipartisanship with energy than any other topic, so there’s a side of things that’s not going to change,” said energy researcher Michael Webber, a professor at the University of Texas, Austin. “I don’t think a lot of the energy legislation is actually at risk of being repealed.”

Despite saying he’d “terminate” the Inflation Reduction Act, Biden’s signature legislation that allocated $391 billion for clean energy projects, and rescind any unspent funds that could prove unpopular. “The money is mostly flowing into Republican districts and multiple Republican House members have already said on the record, ‘please don’t repeal it,’” Webber said.

There are other potential positives: Trump’s declaration that he’ll remove regulatory barriers to business will mean less red tape around getting more clean power to the grid. Adding new power transmission lines has become a major bottleneck for new wind and solar farms. “That would help enable cheap energy projects – and solar is absolutely the cheapest,” said Dave Miller, cofounder and managing partner for Clean Energy Ventures, which oversees funds worth $415 million. “They could come online faster, which would be good for everyone if you’re removing regulatory barriers rationally.”

Also, a major pullback from clean energy, batteries and electric vehicle tech only benefits China, already the leader in those, Steyer said.

“Honestly, hiding from markets, hiding from competition, trying to keep it out, has that ever worked?”

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