The shock waves created by Donald J. Trump’s surprise presidential victory over Hillary Clinton have yet to subside. As of this writing, throngs of anti-Trump protestors have taken to the streets all over the country. Having alienated several groups during the campaign, Trump also provided enough damning statements regarding climate change and renewable energy to put a scare into wind energy advocates. In fact, there have been rumblings that have leaked out concerning Trump’s initial priorities.
For example, the U.S. Environmental Protection Agency and the Clean Power Plan (CPP) are in the president-elect’s crosshairs, as the president-elect has made no secret of his disdain for the government agency. Reportedly, he will cut agency funding and roll back several initiatives, such as the CPP. Even if the CPP emerges victorious from its current legal entanglements, the Department of Justice under a Trump administration will likely decline to defend the CPP in the courts. Further, Trump has vowed to take the U.S. out of the Paris climate change agreement.
Although such developments are unwelcome, Trump’s ascension to the Oval Office does not have to be the show-stopping, soul-crushing event that many envisioned the morning after the election. On the bright side, the production tax credit will likely remain intact. Barring an act of Congress – and lest we forget, Republicans will control both houses – the wind industry’s key tax incentive is likely to remain unscathed, explains David Burton, partner at law firm Mayer Brown.
“Unlike the CPP, [the tax credits for wind] are statutory,” Burton explains. “A statute can only be changed by Congress’ passing a new law.”
And due to the sheer number of issues on Trump’s to-do list, Burton says it is unlikely that the president-elect would opt to attack the tax credits, given that several members of his own party support them.
“Wind is fortunate to have a number of powerful Republican allies in Congress, including Sens. Grassley, Collins, Thune and Hatch.”
Powerful and influential champions aside, the technology has advanced to the point where it can compete straight up with new sources of electricity – a free market principle that Trump and his designates cannot ignore.[adright zone=’190′]
According to financial services company Lazard, wind energy is now one of the most affordable options for new electricity generation based on unsubsidized levelized cost of energy, or LCOE (based on dollar per megawatt-hour). In its 2015 Levelized Cost of Energy Analysis report, Lazard notes that wind is competitive with conventional generation in certain regions of the country. The unsubsidized LCOE for wind energy ranged from $32/MWh to $77/MWh in 2015 – with pricing the lowest in the interior region of the country. And technological advancement will help continue to bring down costs.
Lastly, one final word. Be skeptical about polls and trends. As evidenced on election night, no one truly knows what is going to happen. Because if they did, you would be reading an entirely different column right now.