As the election and the potential for a Republican sweep approach, discussions about the future of the IRA have intensified notably in the recent period.
While Former President Trump has voiced opposition to the legislation, Evercore ISI analysts believe a full repeal is "highly unlikely," especially considering the substantial investments made since the bill's passage in predominantly Republican districts.
"Rather, we believe the majority of the current legislation will remain intact, with the potential for some slight modifications, like the capping of certain tax incentives, making them more difficult to monetize and/or the potential easing of certain EPA emissions rules,” analysts said in a note.
Since its inception, the IRA has driven over $200 billion in cleantech manufacturing investment in the United States, with approximately 85% directed towards Republican districts.
This investment and the creation of around 74,000 jobs in these areas make it logical that the core elements of the legislation would remain, analysts noted.
Evercore notes that the increasing need for power in the U.S. is clear, with ongoing investments across various generation types to meet the growing demand. They argue that this demand will likely not be impeded by any legislation.
“The fact remains, power is power and those yearning for it will take it in any form they can right now whether that be solar, wind, or natural gas,” analysts continued.
They believe such an outlook is positive for the Clean Tech sector, particularly for companies like General Electric Ventures (GEV), Bloom Energy (NYSE:BE), First National of Long Island Corporation (FNLC), and Stem Inc. (NYSE:STEM).
“Additionally, there was nothing said in former President Trump’s RNC acceptance speech last night which changes our view.”