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NextEra CEO shrugs off Trump threat to renewables

SNL Image

A turbine at Puget Sound Energy Inc.'s Wild Horse windand solar farm in Washington.

Source: Puget Sound Energy

Donald Trump has labeled wind turbines visual blights and bird-killingmachines, suggested solar power is a bad investment and called climate change aChinese invention. Even so, there are doubts that the Republican presidentialnominee could do much if he wins to hurt the country's renewable energyindustry.

"I don't lose a lot of sleep over it," Chairman,President and CEO James Robo, whose utility signed contracts for 2,100 MW ofnew renewable energy projects last year, said Sept. 27 at the Wolfe ResearchPower and Gas Leaders Conference in New York City.

Regardless of who wins the presidency in November, Robo saidwind and solar companies will continue lowering their costs and improvingtechnology; federal tax credits that were extended last year are likely toremain on the books; and carbon regulations, in one form or another, areinevitable.

On the other hand, the industry stands to get a boost ifHillary Clinton is in the White House. The Democratic nominee mentionsrenewables when she talksabout creating jobs, and she has proposedinstalling half a billion solar panels — representing about 140,000 MW — in herfirst term.

"In the near term, yes, of course, it will matter,"Williams Capital Group senior analyst Cynthia Motz wrote of the election in aSept. 30 report. But like it or not, "globalization is real," shesaid, and companies "are forging ahead because it makes sense to integratemore alternative energy and renewables into the mix."

The national energy debate — Trump has called himself "agreat believer in all forms of energy" while to cut taxes and regulationson fossil energy production and infrastructure — is playing out at a time whenthe renewables industry is tryingto shed its "alternative" status.

Together, the wind and solar industries employee around300,000 people in the U.S.; the country's "renewable/alternative energy"sector generated around $200 billion in revenue at the end of 2015, accordingto Williams Capital Group; and new wind and solar capacity, while still arelatively small sliceof the country's energy portfolio, increased37% and 60%, respectively, in the second quarter.

"The next four years are going to be the best fouryears in the … history of the U.S. renewable [energy] business," Robosaid, noting thecertainty of federal tax incentives.

Others see challenges ahead, particularly in the solarsector.

After rushing to build projects before the federalinvestment tax credit expired, a development lull set in after Congressextended theincentive late last year. Companies scrambled to fill 2017 orders at the SolarPower International conference in Las Vegas in mid-September, but "fewdeals seem to be getting signed today," Credit Suisse analysts said.

Additionally, a manufacturing glut is driving down solarmodule prices at a pace that has taken industry veterans by surprise, CreditSuisse said. A round of consolidations is expected.

Most companies now seem to expect headwinds to be a part ofthe normal solar business cycle, Motz of Williams Capital Group said. Still,renewables are coming to be viewed as "more mainstream," said Motz,who is bullish on the sector in light of "macro industry trends" thatinclude a renewed focus on climate change.

Asked about a 2012 tweet in which Trump said China createdthe "concept of global warming" to hurt U.S. manufacturers, campaignmanager Kellyanne Conway recently said the candidate believes climate change isnaturally occurring.

In Iowa, big wind country, Trump's comments and ads havebeen "relatively negative on renewables," William Fehrman, presidentand CEO of BHE Renewables LLC,a subsidiary of BerkshireHathaway Energy, said at the Wolfe conference. "But yet whenyou look at his policy positions, I'm not sure I fully can understand what he'sdoing."