What Trump's 2018 Budget Means for Renewable Energy
Trump’s 2018 budget proposal is out. And it does not paint a pretty picture for certain industries.
To investors, nothing in the proposed budget should come as a surprise — it simply echoes the promises the Trump administration hounded throughout its campaign.
The 2018 budget emphasizes increased military spending and increased homeland security. It aims to crack down on immigration and tighten our borders. Which means these government sectors are getting some hefty boosts.
The U.S. military will receive a $54 billion increase — which would make our military the biggest it has been since the days of Ronald Regan. Homeland Security will receive a smaller, but no less impressive, $3 billion boost.
And where is all this money being taken from? You guessed it: the EPA and energy sector.
Trump’s budget cuts would send the EPA back to the dark ages. Under the Obama administration, the EPA received $8.2 billion a year. Under Trump's budget, it will receive $5.7 billion — a loss of 31%.
The energy sector will also take a hit. Its funds will be reduced by $1.7 billion.
Of course, none of these budget cuts have been approved by Congress. So it is a bit too early to panic.
But say the budget cuts go through? What will happen to the black sheep of Trump's agenda, the renewable energy market?
In a way, nothing will change.
The main victim of these budget cuts is the EPA. The department has always been a strong supporter of renewable energy. It openly promotes solar, wind, biomass power, and hydropower. And under the Obama administration, the EPA educated millions of Americans about the cost benefits of solar energy.
But so far, the cuts seem to target environmental programs. The EPA's Superfund program, which removes factory waste, is on the chopping block.
But, as many critics have already voiced, these sweeping budget cuts are the acts of a butcher, not a surgeon. The Trump administration is hacking away at the EPA with a cleaver instead of delicately picking the programs that have proven ineffective. This is one of the reasons Congress will push back against this budget. And it might be the reason that, in the end, this budget gets rejected.
But even if it gets passed, the renewable energy sector won’t fall off the face of the Earth.
Because the EPA has already completed a fundamental task: it educated America about new kinds of energy. And even if it suffers under Trump, the renewable energy revolution is not going to die.
Just look at the solar industry.
Solar is the EPA's golden success story. Solar installations have been increasing for years. In the last decade, it had a compound growth rate of 60%. Currently, 209,000 Americans work in the solar industry. That is double the number of employees in 2010.
And, despite Trump’s bravado about the coal industry, there are only 174,000 blue-collar full-time jobs left. It is obvious that the solar industry is getting more attention. And unlike coal, its growth trend isn't crippled by antiquated technology.
If the Trump administration wanted to stop solar and promote coal, it would have to drown a thriving industry. At this point, it's not doable. Renewable energy is already out of the bag.
So don't fret over the budget cuts if you are a renewable energy investor. The public has already put its money where its mouth is. Renewable energy isn't going anywhere.