Biden has an ambitious climate policy — Here's what it means for alternative energy stocks

Democratic 2020 U.S. presidential candidate and former Vice President Joe Biden walks past solar panels while touring the Plymouth Area Renewable Energy Initiative in Plymouth, New Hampshire, U.S., June 4, 2019.
Brian Snyder | Reuters

(CNBC PRO is looking at the most important investing angles surrounding the election. For the complete investor's guide, see here.)

Alternative energy stocks are on a tear this year as falling costs drives adoption of renewables, and while former Vice President Joe Biden's supportive environmental policies would help the sector, Wall Street analysts say these stocks will continue to outperform no matter who takes the White House on Tuesday.

"Momentum across clean tech is epic," Raymond James succinctly summed up in a recent report.

President Donald Trump and Democratic nominee Joe Biden's differing stance on the environment and environmental policy is well documented.

Trump has rolled back dozens of environmental policies during his four years in the White House, including withdrawing the U.S. from the Paris Agreement. He has continuously praised the U.S. oil and gas sector, and declared the coal industry was back, although that hasn't panned out.

Biden, on the other hand, has outlined a $2 trillion climate proposal that would make the U.S. power sector carbon free by 2035, while pushing the country to net zero emissions by 2050. At the second presidential debate, Biden said he intends to "transition away from the oil industry."

While Biden's policies are certainly more supportive for clean energy, analysts are quick to note that renewables have boomed over the last four years under the Trump administration due to favorable economics. The International Energy Agency noted in its annual report that solar is now the "cheapest source of electricity in history."

"Ignore the President's rhetoric for a moment; Donald Trump is the greenest President in U.S. history measured by the pace at which the nation's electricity grid has de-carbonized during his first term in office," noted JPMorgan analysts in a recent report. "U.S. Presidents come and go, but wind and solar (and BEVs and Hydrogen) are here to stay owing to declining unit costs and sustainability."

"We think all names under our coverage (including renewable energy, electric vehicle, and smart grid) will work regardless of who wins the 2020 election," added equity research firm Baird.

For investors looking to capitalize on the burgeoning space, there's no shortage of options.

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