The clean energy sector has been on a wild ride since the start of the year. With the Trump administration taking office in January, policy shifts have sent ripples through the industry—raising both challenges and opportunities for investors.
What’s Happening? 🔍
1️⃣ Executive Orders & Policy Impact
The administration issued several executive orders in January, including the “Unleashing American Energy” EO, which paused federal clean energy grants and loans from the Inflation Reduction Act.
Another order declared a National Energy Emergency, prioritizing fossil fuel projects and reducing regulatory oversight for traditional energy sources.
A deregulation push aimed at easing restrictions on domestic energy development has added further uncertainty to the renewables space.
2️⃣ Market Reaction & ETF Performance
Initial Shock (January 20-31, 2025): Clean energy stocks and ETFs dropped sharply as investors feared a rollback in federal support.
Partial Recovery (February 1-10, 2025): As markets processed policy updates and the administration provided clarifications, some clean energy ETFs stabilized or saw slight rebounds.
ETF Performance (YTD & Since Inauguration)📊
🔹 iShares Global Clean Energy ETF (ICLN): +0.42% YTD (but saw volatility post-inauguration)
🔹 Invesco Solar ETF (TAN): Flat to slightly down since January 20
🔹 Invesco WilderHill Clean Energy ETF (PBW): +0.72% YTD, reflecting some optimism
🔹 First Trust Global Wind Energy ETF (FAN): +0.19% YTD, a minor uptick despite turbulence
🔹 First Trust Nasdaq Clean Edge Green Energy Index Fund (QCLN): Slight decline post-inauguration
For reference, broader market indices:
📈 S&P 500 ETF (SPY): +1.9% YTD
📈 Nasdaq-100 ETF (QQQ): +1.7% YTD
While clean energy ETFs underperformed relative to the S&P 500 and Nasdaq, their resilience post-shock suggests investors are still cautiously optimistic about long-term trends.
Investor Takeaways ⚖️
✅ Watch Policy Signals: The administration is recalibrating its stance on clean tech—staying ahead of new regulations will be crucial.
✅ Volatility = Opportunity: Some clean energy stocks and ETFs may now be undervalued, making this a potential buyer’s market for long-term investors.
✅ Diversification is Key: With policy uncertainty, hedging clean energy investments with broader market exposure can help mitigate risk.
Despite short-term policy-driven volatility, the long-term global shift towards clean energy remains intact. The key question: Is now the time to buy the dip?
What are your thoughts on the new administration’s impact on clean tech? Are you staying invested, pivoting, or waiting for more clarity? Let’s discuss!
