There is a classic Saturday Night Live commercial where a bunch of guys wearing designer jeans are chatting away and every comment is an epically bad idea. It was meant as a spoof of that era’s television commercials, but it also works amazing as a lead-in to uncomfortable topics. So, I figured I was wearing Bad Idea Jeans when I thought of politics and renewable energy as a discussion point, but it turns out renewable energy is increasingly bipartisan (yes, I just said that).
The December 27th stimulus bill included several extensions and additions to the tax credits available for renewable energy. For example, the solar investment tax credit (ITC) was extended for two years, a positive not only for solar projects but also for things like fuel cells and microturbines. A standalone ITC was also created for offshore wind, which should help advance a renewable sub-sector that has much promise given offshore wind resources tend to be better than onshore. Similarly, the electricity production tax credit (PTC) was extended for one year, which mostly benefits wind generation though is also a positive for biomass, geothermal, landfill gas and more. For a bill that was stripped of its most controversial pieces to ensure passage, the fact these renewable incentives remained is a testament to the increasingly bipartisan nature of renewable energy policy initiatives.
A glance at the map below implies renewable energy is touching just about everyone in the United States. Not lost on our political leaders is this growth also translates to more jobs and tax revenues, and thus support for renewable energy reaches across political lines.
Source: U.S. Department of Energy
As an example, the table below ranks 2019 production by state for wind and solar. The top four wind producers in the United States make up 54% of total wind production and are considered red (Republican) states. Similarly, three of the top five solar producers that represent 53% of total solar production are considered blue (Democratic) states. This makes it easy for Politician A to say to Politician B if you scratch my back on solar, I’ll scratch yours on wind.
Source: U.S. Department of Energy
This brings us back to a core driver of the de-carbonization movement, which is the virtuous cycle of renewables adoption. Public policy sets the stage by providing incentives for technological innovation that lowers costs and encourages incremental public policy. There is little that can stop us as a society when we (Political Class + Main Street + Wall Street) work together.
RENEW Performance Tracker
*Source: Bloomberg. Please review disclosure information at the end of this post
Renewables Roundup
Data Dispatch: US Renewable Pipeline Poised To Add 172.5 GW Through 2024
https://energycentral.com/news/data-dispatch-us-renewable-pipeline-poised-add-1725-gw-through-2024
In Pursuing Historic Climate Change Agenda, Biden May Find Surprising Ally
https://www.nbcnews.com/politics/white-house/pursuing-historic-climate-change-agenda-biden-may-find-surprising-ally-n1252234
The Biggest Battery Breakthroughs Of 2020
https://newatlas.com/energy/biggest-battery-breakthroughs-of-2020/
In Boost for Renewables, Grid-Scale Battery Storage Is On The Rise
https://e360.yale.edu/features/in-boost-for-renewables-grid-scale-battery-storage-is-on-the-rise
Green Boom’s Hottest 2021 Trade May Turn Out To Be Utilities
https://finance.yahoo.com/news/green-boom-hottest-trade-2021-050000351.html?soc_src=social-sh&soc_trk=ma
Why You Should Invest In Green Energy Right Now
https://www.investopedia.com/articles/markets/070814/why-you-should-invest-green-energy-right-now.asp
*No Warranties. The accuracy and/or completeness of any Eagle Global Advisors index, any data included therein, or any data from which it is based is not guaranteed by Eagle Global Advisors, and it shall have no liability for any errors, omissions, or interruptions therein. Eagle Global Advisors makes no warranties, express or implied, as to results to be obtained from use of information provided by Eagle Global Advisors and used in this service, and Eagle Global Advisors expressly disclaim all warranties of suitability with respect thereto.
You Must Make Your Own Investment Decision. It is not possible to invest directly in an index. Index performance does not reflect the deduction of any fees or expenses. Past performance is not a guarantee of future returns. You should not make a decision to invest in any investment fund or other vehicle based on the statements set forth in this document, and are advised to make an investment in any investment fund or other vehicle only after carefully evaluating the risks associated with investment in the investment fund, as detailed in the offering memorandum or similar document prepared by or on behalf of the issuer. This document does not contain, and does not purport to contain, the level of detail necessary to give sufficient basis to an investment decision. The addition, removal, or inclusion of a security in any Eagle Global Advisors index is not a recommendation to buy, sell, or hold that security, nor is it investment advice.
Contact Us
Michael Cerasoli, CFA
Michael leads the Renewables effort at Eagle Global Advisors, including the development of active and passive strategies, and portfolio management. He is also the Co-Head of the Energy Infrastructure team and Co-Chair of the Energy Infrastructure Investment Committee. He shares Portfolio Manager responsibilities for the firm’s four separate Energy Infrastructure strategies. Prior to joining Eagle in May 2014 Michael was employed by Goldman, Sachs & Co. for ten years where he covered Midstream for seven years and small/mid cap Oil Services for three. Prior to Goldman, Michael worked for three years as a sell-side equity trader at various Wall Street firms. He earned bachelor’s degrees in Economics and History from Union College, and an MBA from the Hagan School of Business at Iona College. Michael holds the Chartered Financial Analyst designation.
Curt Pabst
Curt is a Managing Director in the Energy Infrastructure Business, a member of the Energy Infrastructure Investment Committee, and co-head of the Renewable Energy Business at Eagle Global. Prior to joining Eagle, Curt held a similar position at an Midstream Energy-dedicated asset management firm in Dallas, Texas. He has 39 years of investment experience. He has served as a partner/principal in both a hedge fund of funds and a venture capital fund. Curt earned his BA in Economics from Grinnell College and a professional certification in Energy Innovation and Emerging Technologies from Stanford University.
