Trump trade, energy policies cloud US clean power outlook

Concerns abound for renewable energy and battery storage companies heading into the first-quarter earnings season, with Wall Street widely bracing for unfavorable financial impacts from US President Donald Trump's sweeping trade and energy policy pivots.

Wind, solar and battery supplier share prices have suffered more than the overall stock market, with the S&P Global Clean Energy index retreating roughly 14% since the November 2024 general election, compared with an 8.6% drop for the S&P 500 and a less than 1% decline for S&P 500 Utilities.

The selloff has been especially sharp for some clean energy companies. As of April 17, embattled rooftop solar and storage supplier Sunnova Energy International and battery storage technology specialist Fluence Energy had seen their share prices tumble 97.5% and 83.5%, respectively, since the election. Most of their peers have also seen deep double-digit percentage-point drops.

"Fluence is the most disrupted among our coverage by reciprocal tariffs," analysts at Bank of America Securities said in an April 16 client note, pointing to tariff impacts on gross margins, the company's "supply chain migration strategy" and the ramp-up of US manufacturing partnerships as likely topics of Fluence's fiscal second-quarter earnings call on May 8.

Trump on April 9 paused previously announced tariffs on many countries, though he ratcheted up rates on Chinese imports to 145%. Those come on top of other levies specific to lithium-ion batteries. In response, battery storage suppliers have cautioned about rising costs for US developers and consumers, as well as a market pause as companies adjust their strategies.

"Fluence is actively working with customers to navigate the changing trade policy landscape to meet their needs," Peter Williams, the company's chief product and supply chain officer, said in an emailed statement.

The company is looking to its "diversified international supply chain and US-based production" to provide customers with "reliable battery storage systems that reduce their exposure to changing trade dynamics," Williams added, calling Fluence "the only energy storage provider able to deliver domestically manufactured systems starting in 2025."

Fluence relies on facilities in Arizona, South Carolina and Utah for key system components, and is looking to a battery cell plant in Tennessee operated by Japan-based AESC Group to help loosen its reliance on Chinese imports.

The storage system supplier's domestic supply chain expansion "can't come fast enough," said Bank of America analysts. But AESC's factory ramp-up is "a significant gating factor" that limits how much domestic product Fluence can supply, they added.

The highly China-reliant battery storage segment "is emerging as the overwhelming area of uncertainty," analysts at Jefferies said in an April 11 research note. While batteries planned for 2025 deployment were largely already in the US before tariff levels jumped, "projects for 2026–2027 are posing a risk," they said.

The analysts see "near-term headwinds related to China tariffs as [Fluence] continues to make progress toward ramping its US supply operations."

'Seems like everyone is pausing'

Trump's trade and policy moves in his first months back in office, coupled with congressional Republicans' possible repeal of or deep cuts to Inflation Reduction Act clean energy tax credits, have had a chilling effect on US renewable energy and energy storage industries.

"It seems like everyone is pausing," Roth Capital analysts said in an April 20 note, pointing to a tariff-induced slowdown for utility-scale solar and energy storage installations — the two leading resources added to the US grid in 2024.

Since November 2024, 20 large-scale clean energy manufacturing and generation projects have been canceled, closed or downsized, according to nonpartisan business group E2. The nearly $8 billion in withdrawn investments in the first quarter of 2025 are triple the amount of clean energy investment cancellations between 2022 and 2024, E2 said April 17.

"Overall, the issue is uncertainty," Michael Timberlake, E2's communications director, said in an email. "And it's not just the trade/tariff front, but also the uncertainty around the future of clean energy tax credits and incentives."

E2 is tracking additional projects at risk of delay or cancellation.

Offshore wind projects appear increasingly exposed to risk in the US after the Trump administration on April 16 ordered a construction stop at Equinor ASA's 810-MW Empire Wind 1 facility off the New York coast.

"This is a clear negative for US offshore wind and highlights the potential risks for under-construction/permitted assets," Jefferies analysts said April 17.

Some market observers have noted heightened risks for European power giants Ørsted and Iberdrola, both of which have broken ground on offshore wind projects in US waters.

Jefferies analysts are "bearish" on GE Vernova's wind business, but are "bullish" on its electrification and power segments.

"We see permitting constraints on onshore wind as having a meaningful slowing effect on the sector as best we can tell, beyond continued cautious datapoints ahead ... on offshore wind," the analysts said in an April 17 note. Although investors already appreciate challenges for wind, "we perceive investors could yet still be disappointed by depth of deceleration," they added.

More solar factories

E2's latest monthly update on the US clean energy economy also showed over $1.6 billion in newly unveiled investments into new solar, electric vehicle and power grid equipment factories across six states in March. That included a Tesla energy storage assembly hub in Texas and a pair of crystalline-silicon photovoltaic cell factories, also in Texas.

Also in March, materials science company Corning said it was targeting its first commercial shipments of solar wafers in the second half of 2025 from a site in Michigan that already produces polysilicon.

Such investments appear poised to help fill in gaps in the US solar supply chain as domestic panel production capacity recently reached 50 GW, according to the Solar Energy Industries Association.

The largest US panel maker is thin-film specialist First Solar, which plans to expand its domestic factory footprint to 14 GW by 2026 through expansions in Alabama, Louisiana and Ohio.

Roth Capital analysts on April 20 flagged ongoing concerns related to First Solar panel underperformance, which CEO Mark Widmar acknowledged on the company's fourth-quarter 2024 earnings call in February.

But the company "remains best positioned" among its clean energy peers if current tariffs and tax incentives hold, Bank of America analysts said in an April 13 note.

Bank of America analysts also view utility-scale tracking system supplier Nextracker Inc. as well positioned heading into its fiscal fourth-quarter 2025 earnings call, noting its focus on US manufacturing and saying in an April 16 note they expect the company to continue its "solid execution streak."

But Nextracker could take a "conservative approach" to its financial guidance, "given the number of policy and trade uncertainties in the market," they said.

'Triple-whammy' for home solar

Several analysts pointed to residential solar as one of the most challenged segments of the US clean energy sector, with various degrees of risk for companies including home solar and storage installers Sunrun and Sunnova, and equipment suppliers Enphase Energy and SolarEdge Technologies.

Residential solar "has been hit with a 'triple-whammy' from declining market growth, IRA uncertainty, and now tariffs (assuming they stick around)," Jefferies analysts said in an April 10 note. "It's difficult to make a case for any rebound in [residential solar, near term or long term] without visibility into IRA and a challenged macro."

In the nearly two years since California vastly reduced compensation for excess rooftop solar generation, companies reliant on the largest US home solar market have struggled. SunPower entered Chapter 11 bankruptcy in August 2024, while Sunnova is struggling with debt maturities.

Sunrun, the biggest US residential solar supplier, "is at a stand-still" as it awaits clarity on IRA incentives amid "tariff noise and heightened concerns of a US recession," Jefferies analysts said.

A negative outcome for tax credits could be "make or break" for the sector as a whole, they added.

The analysts pointed to first-quarter cash generation, installation volumes and 2025 guidance as key topics for Sunrun's earnings call, scheduled for May 7.