Chances are rising that the blue wave of Democrats will take control over the House and Senate in November. According to a poll, Democratic presidential candidate Joe Biden now has a 71% chance of winning the White House. Biden is nine points ahead of President Donald Trump, according to the latest survey by The Wall Street Journal and NBC.
This means that Biden-friendly investment policies should be in focus right now. One such prominent area is green energy.Needless to say, green or clean energy shares are soaring. Biden’s stance is totally opposite to Trump, who supports fossil fuel.
Biden Backing Clean Energy
Like many other democratic leaders, Biden is also a proponent of clean energy investing. If Democrats rule the Congress and White House again, the already soaring stocks in the space will get a further boost. Biden is forming a plan — a Clean Energy Revolution — to address the issue of climate emergency. He sees America becoming a 100% clean energy economy by 2035 and having net zero emission by 2050.
Biden has released a $2-trillion-plan toward combating climate change that will eliminate carbon emissions from the power grid by 2035 and accelerate the uptake of electric vehicles. If this happens, the entire supply chain of the electric vehicle industry will be charged up.
According to the source, about 47% of total electric vehicles running globally are on the roads of China and 20% are in the United States. The majority of U.S. electric vehicles are made by Tesla TSLA.
Now, Biden plans to upgrade 3 million vehicles into the electric form that the government regularly purchases. These would all be indigenous vehicles. The plan also envisages new job creation with the federal government helping to build 500,000 electric vehicle charging stations, and supporting research focused on battery technology.
Tax incentives for renewable energy projects such as wind and solar are due to end in 2020. Biden has pledged to extend these and support the pickup of projects like energy-efficient buildings. “The growth outlook for electric vehicles, renewables, hydrogen power, battery storage and many more industries would be turbocharged” on Biden’s winning, said Simon Webber, a Schroders portfolio manager for global equities, quoted on Wall Street Journal.
Impact on Investing World
The WilderHill Clean Energy Index, a compilation of green-power companies listed on the U.S. exchanges, surged to a more than nine-year high on Aug 19, as quoted on a Wall Street Journal article. The index has gained more than 33% since the start of July.
Biden’s win would also benefit stocks like First Solar Inc. (FSLR) or electric vehicle giant Tesla and ETFs like Invesco Solar ETF TAN and iShares Global Clean Energy ETF ICLN. The United States has about 40% exposure to the global fund ICLN.
Not only stocks from the United States, the world’s largest wind-turbine manufacturer, Denmark’s Vestas Wind Systems A/S, is also hovering near its record high. It has surged more than 90% since the bear market in March, as noted by Wall Street Journal. First Trust ISE Global Wind Energy Index Fund (FAN has also added 5.2% past month.
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