Trump's Anti-Wind Policy and Its Long-Term Impact on Renewable Energy Equity Valuations

The U.S. renewable energy sector is navigating a storm of regulatory uncertainty as the Trump administration's aggressive anti-wind policies reshape the landscape. From abrupt project cancellations to legislative rollbacks of tax incentives, these actions have created a hostile environment for firms like Ørsted, Vestas, and Iberdrola Renewables (EDPR). Yet, amid the chaos, investors may find undervalued opportunities for those willing to navigate the risks.

Policy Shockwaves: A Hostile Environment for Wind Energy

The Trump administration's 2025 executive order halting offshore wind leasing and construction has been a seismic blow to the sector. Projects like Ørsted's $9.4 billion Revolution Wind initiative—80% complete with 45 turbines installed—were abruptly frozen under vague “national security” justifications. This pattern of obstruction, coupled with the One Big Beautiful Bill Act (OBBBA), which shortened tax credit eligibility timelines, has forced developers to accelerate projects or abandon them altogether.

The economic toll is staggering. Ørsted's shares plummeted 30% in August 2025 after its $60 billion rights issue announcement, while Equinor's Empire Wind project incurred $1 billion in losses. The Department of the Interior's expanded permitting delays and the EPA's procedural hurdles further compound the sector's challenges. For context, the Center for American Progress estimates 42,000 jobs—both direct and indirect—are now at risk, with 17,000 tied to offshore wind alone.

Equity Valuations: A Sector in Transition

Renewable energy equities have traded at significant discounts to their intrinsic values in 2025. Ørsted, for instance, is valued at DKK 213 per share, far below Morningstar's revised fair value of DKK 283. Its debt-to-EBITDA ratio has ballooned to 5.8x, and its return on capital employed (ROCE) has fallen to 4.6%, reflecting the strain of regulatory volatility. However, the company's recent rights issue—though dilutive—aims to stabilize its balance sheet and refocus on core offshore wind markets in Europe and Asia-Pacific.

Vestas, in contrast, has shown resilience. Its stock surged 10.1% following the OBBBA's passage, as it secured a 950 MW U.S. wind order and committed to a $1.7 billion manufacturing expansion. With a trailing twelve-month (TTM) price-to-earnings (PE) ratio of 27.78—well below its 10-year average of 72.96—Vestas appears undervalued. Its 35% U.S. offshore wind market share and 15 MW turbine technology position it as a leader in ESG-driven markets.

Iberdrola Renewables (EDPR) has also faced headwinds but remains a relative safe haven. Its diversified international portfolio and strong EBITDA guidance suggest stability, even as U.S. policy uncertainty drags on sector multiples. The median EV/EBITDA for green energy firms in Q4 2024 was 11.1x, down from 18.2x in 2020, signaling a correction rather than a collapse.

Strategic Risks and Opportunities

For investors, the key lies in balancing short-term volatility with long-term fundamentals. The energy transition remains inevitable, driven by falling costs for wind and solar and global climate commitments. However, U.S. policy shifts have created a “geography premium,” where firms with diversified exposure to stable markets (e.g., Europe, Australia) outperform those overexposed to the U.S.

Ørsted's pivot to offshore wind in Europe and Asia-Pacific, for example, mitigates U.S. regulatory risks. Similarly, Vestas's U.S. manufacturing investments align with Inflation Reduction Act (IRA) domestic content requirements, insulating it from some policy shocks. EDPR's global footprint and operational expertise in offshore wind further enhance its resilience.

Yet, risks persist. The Trump administration's pro-fossil fuel agenda—exemplified by the “Unleashing American Energy” executive order and coal plant extensions—diverts capital from renewables. Meanwhile, ESG-focused ETFs face outflows, with $7.7 billion leaving ESG funds in 2023 alone. This trend underscores the need for investors to prioritize high-impact, transparent strategies over broad ESG funds.

Undervalued Opportunities in the Green Energy Sector

Despite the headwinds, the sector offers compelling entry points for long-term investors. Ørsted's 25% upside potential from its revised fair value, Vestas's undervalued PE ratio, and EDPR's stable EBITDA guidance all suggest attractive risk-reward profiles. Additionally, ESG-themed ETFs with strong governance frameworks—such as those focused on renewable infrastructure—may offer diversified exposure to the energy transition.

Investors should also consider alternative assets like green bonds and private credit, which provide stable returns while supporting clean energy projects. For example, Ørsted's exploration of green bonds to fund short-term cash flow gaps highlights the sector's adaptability. Similarly, AI-driven energy solutions—such as smart grids and battery storage—are gaining traction as the AI energy bottleneck intensifies.

Conclusion: Navigating the Storm

The Trump administration's anti-wind policies have created a volatile but not insurmountable environment for renewable energy firms. While project cancellations and regulatory hurdles pose immediate risks, the long-term fundamentals of the energy transition remain intact. For investors, the path forward lies in identifying undervalued equities with strong balance sheets, diversified geographies, and ESG-aligned strategies.

As the sector recalibrates, patience and strategic diversification will be key. The next decade will likely see a resurgence in renewable energy as global demand for clean power accelerates. For those willing to weather the storm, the rewards could be substantial.