Renewable fuel's future uncertain under new administration
Lower oil prices pose challenge for renewable diesel
Although renewable diesel prices are attractive or near parity to conventional diesel in some regions, it may become more difficult to prove a positive ROI in a business context. For example, President-elect Trump intends to increase access to oil production and lower energy costs. Accordingly, alternative fuels or other pathways to decarbonization could become less accessible or financially attractive.
An increased focus on oil production is expected to lower barrel oil pricing to the lowest rates realized in over four years. Additional investment in North American fuel feedstock (agricultural and other sources of alternative fuels) availability would be necessary to maintain parity between conventional diesel and renewable diesel.
Global trade tensions raise solar energy costs
President-elect Trump’s sweeping plan to impose tariffs on imports from Canada, Mexico, and various Asian countries, including China, is only one of several dynamics to plan for in the weeks and months ahead. China is the largest manufacturer of solar panels, with increased tariffs resulting in higher prices for consumers and project owners.
Tax credit scrutiny could slow renewable energy adoption
As part of the new administration’s agenda, there are plans to evaluate and potentially tighten the rules around consumer tax credits for EVs, rooftop solar panels, and heat pumps. Any change in this area could reduce the affordability and adoption rates of these renewable products.
However, maintaining investment incentives for large-scale wind, solar, and battery storage projects could ensure continued growth in the renewable energy sector. This balance might sustain progress toward energy and environmental goals despite potential setbacks at the consumer level.