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Wind turbines operate at sunrise in the Permian Basin oil and natural gas production area in Big Spring, Texas, U.S., on Feb. 12, 2019.

Nick Oxford/Reuters

Renewable energy stocks have performed superbly under the tenure of coal-loving U.S. President Donald Trump. Now, some observers believe that a Joe Biden administration will give the green sector – including a number of Canadian stocks – its next big push.

Mr. Biden is leading in national polls with less than 11 weeks before Americans vote for their next leader, suggesting that global warming is about to be taken more seriously.

Already, Mr. Biden has issued a climate plan, establishing bold targets for creating a green U.S. energy grid by 2035 and spending US$2-trillion on renewable energy infrastructure and clean-energy research and development over four years.

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“It includes aggressive climate targets that would make the plan, if passed, the most progressive piece of clean energy [legislation] in America, including California,” Ian de Verteuil, a strategist at CIBC World Markets, said in a note.

For investors who like the idea of betting on companies that offer solutions to global warming, a Joe Biden presidency is looking like very good news, even for Canadian companies. Mr. de Verteuil singled out Algonquin Power & Utilities Corp. as a standout, given its focus on renewable energy generation and strong expansion into the United States.

He said that other renewable power generators that stand to benefit include Brookfield Renewable Partners LP, Innergex Renewable Energy Inc., Boralex Inc., Northland Power Inc. and TransAlta Renewables Inc., all of which are targeting U.S. growth.

The wrinkle here: As Mr. de Verteuil pointed out, there is a big difference between a campaign document that is short on details and actual policy, the implementation of which may require the Democrats to win control of the U.S. Senate.

“While this might make the plan easy to dismiss, we’d note the chances of the Democrats taking the Senate are almost even and would caution investors to not simply write off the contents of the climate plan as the election nears,” Mr. de Verteuil said.

But what’s also worth noting is that for all of Mr. Trump’s rants over the past four years against wind and solar power and his puzzling support for coal, renewable energy stocks have fared remarkably well during his term in office, buttressing the view that green energy is viable even without government support.

The WilderHill Clean Energy Index, composed of 40 U.S.-listed stocks associated with green technology, energy storage and generation, has surged more than 190 per cent since the start of 2017.

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“The prospects for a possible Biden presidency clearly draws a lot of new attention to this space,” said Rob Wilder, chief executive officer at WilderShares LLC, the company behind the clean energy index.

“But it’s actually deeper than that. Solar, wind and better batteries have all matured quite a lot in the past four years. Prices have come down very fast,” Mr. Wilder said in an e-mail.

The index’s exposure to Tesla Inc. has certainly helped its performance: The electric-car maker’s share price has risen 770 per cent since 2017.

But the green sector’s gains have been widespread, and include Canadian companies not in the WilderHill index. Algonquin’s share price has risen 62 per cent since the start of 2017. Northland Power is up 55 per cent over the same period.

The U.S. Energy Information Administration offers some startling figures that help explain what’s going on here: Renewables are ascendant.

In its latest short-term energy outlook, the EIA forecasts that overall U.S. electricity consumption will decline 3.6 per cent in 2020 (blame it on the pandemic and recession). Coal will bear the brunt, though, falling from a 24 per cent share of U.S. electricity generation in 2019 to 18 per cent in 2020.

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On the other hand, the EIA expects the share of renewables – which it calls the fastest-growing source of electricity generation – will rise from 17 per cent in 2019 to 20 per cent in 2020, because of expanding wind and solar capacity.

Remember: That’s under Mr. Trump’s watch. Mr. Biden could provide an extra reason to remain enthusiastic about green energy, but the bullish argument should prevail no matter the political twists ahead.

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