President Biden is working to bring America back in line with Paris Agreement goals by advocating for major transitions and government spending within several key emissions sectors such as electric vehicles, infrastructure, and energy. The clean energy sector in particular stands to benefit enormously from the infrastructure bill that is currently in Congress, as well as the larger budget reconciliation bill awaiting approval by the Senate.

“We view the clean energy transition as a durable secular trend, enabled by both technological innovation and social imperatives, that should play out over the coming decades,” wrote Katie Deal, Washington analyst for the U.S. Equity Division of T. Rowe Price, in a white paper.

The infrastructure bill, known as the Infrastructure Investment and Jobs Act, works towards the goals of modernizing the electric grid, encouraging and giving support to clean technologies working to capture emissions and produce renewable energy alternatives, and bringing security to energy supply chains that are vital to the country, Deal explained in the paper.

The existing electric grid in the U.S. is in great need of upgrading as the current structure that focuses on central power sources, such as power plants, leaves systems more vulnerable to cyberattacks and the increasing impacts from extreme weather driven by climate change.

“Addressing these fundamental issues will require significant investment to accommodate wind and solar power as well as other clean energy technologies while also meeting the demand‑side challenges posed by the push to electrify other fossil fuel‑burning processes,” Deal wrote.

Renewable energy sources are likely to be spread out, with multiple points supplying smaller supplies. Currently, energy demands in the evening hours do not align with the optimal solar energy supply at midday, and options such as wind turbines will not always be producing energy for the grid. What T. Rowe Price sees as necessary to upgrade the grid includes having larger transmission lines with new transmission capacities that connect to a grid that can cycle energy and store surpluses when not in use with battery-based storage.

Focusing on the Clean Energy of Today and Tomorrow

President Biden’s administration is approaching the clean energy transition in a holistic and sustainable way by encouraging current producers to reduce their emissions and utilize clean energy technologies that currently exist, and by supporting the clean energy technologies of tomorrow by providing funding and encouraging investment.

The budget reconciliation bill that is waiting on a majority vote from the Senate to be passed includes extending existing tax credits for the investment in and production of clean energy projects. It also will create new tax credits and incentives for up-and-coming clean energy tech, and work to curb the power industry’s current carbon emissions.

“Given the extensive innovation and disruption taking place in the power industry and key demand markets, we believe that the bipartisan infrastructure bill—along with other legislative and regulatory efforts—could have important implications for the adoption of clean energy, the broader economy, and dynamics in the utilities, energy, and industrials sectors,” Deal wrote.

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