As recently as 2022, many leaders in corporate America and the investment community were singing the praises of ESG — environmental, social, governance — as the foundation of stakeholder capitalism. It didn’t take long for that tune to change, for understandable reasons.
President Trump didn’t just make “ESG”, “sustainability” and “climate change” dirty words in his “green new scam” rhetoric. The Trump administration’s rollback of environmental regulations, elimination of clean energy subsidies and tax credits, defunding and halting of wind and solar projects, and embrace of the fossil fuels industry accelerated the backlash.
But renewable energy investing remains alive and well, notably among public and private funders of infrastructure projects and clean technology innovation. And following the midterm elections that gave climate-friendly Democrats control of the House and Senate, the prospects of reviving the clean energy agenda suddenly brightened.
Clean energy and solar stocks rallied the day after the election results, which “potentially reduces the risk of further political interference with renewable energy incentives and provides greater protection for the long-term economics of U.S. wind, solar and battery storage investments,” Barclays analysts led by Peter Crampton wrote in a note.
While Trump can veto legislation to restore subsidies and credits and revive projects, and continue to issue executive orders on energy policy, some Republicans may be more inclined to help Democrats override the president in order to appeal to voters outraged over high energy prices — a sentiment expressed in the passage of multiple state initiatives to impede the build-out of electricity-hungry data centers.
The blue wave also shines a spotlight on a bipartisan permitting-reform bill awaiting Senate approval. Several progressive Democrats want to put off the vote until the new Congress convenes in January, giving them time to rewrite provisions favoring renewables projects over fossil fuel ventures.
Ultimately, the midterms could improve the outlook for investors focused on clean energy. That is likely to start with impact investors who specifically seek to generate a competitive financial rate of return alongside positive, proactive social and environmental impact. Opportunities can be found through public equity investments like mutual funds and ETFs that are constructed to invest in clean energy companies. But many investors also seek out pure-play clean energy positions offered through fixed income, private equity, private credit, venture capital, real assets and community-focused investments.
“There are many different approaches that could lead impact investors to be thinking about clean energy investments,” said Amit Bouri, who’s retiring as CEO of the Global Impact Investing Network at year’s end. GIIN’s 2026 survey of impact investors found that 56% have funds invested in clean energy and 25% plan to increase those investments over the next five years. The survey was conducted prior to the midterms.
“Clean energy infrastructure can be really compelling from an investment standpoint, because the financial thesis and impact thesis are mutually reinforcing,” said Justina Lai, chief impact officer at LNW, a wealth management advisory firm. LNW has about $3.5 billion of its total $12.1 billion assets under management invested in impact strategies. She added that it’s challenging to break down the number of clients who are specifically focused on clean energy and clean tech. “Climate change or climate action writ large is likely the most common impact priority that we encounter with our clients,” she said.
While it might be hard to focus on the potential in the renewable energy sector in 2026 with energy commodities leading all sectors of the market as crude oil prices surged, some of the factors Lai cites should be on the radar of investors beyond the impact investing space.
She pointed to the nation’s growing electricity demand — partly tied to data centers — its aging and constrained grid infrastructure, the increasing need for energy storage, the effects of geopolitics on energy security and rising energy costs as major factors driving clean energy investing. Simultaneously, though, because of declining costs and continuing maturity of many clean technologies, “we know that renewables are the lowest cost form of new-build generation, even on a fully unsubsidized basis,” she said.
The proof is in the gigawatts. The U.S. is on pace to add a record 89 GW of clean energy capacity by the end of 2026, with installations projected to exceed that level in 2027, according to BloombergNEF’s latest US Clean Energy Market Outlook. In just the first half of this year, the Environmental Defense Fund and Atlas Public Policy recently reported, 11.5 GW of solar, 8.3 GW of battery storage and 6.3 GW of wind power were installed.
U.S. investment in clean energy and transportation alone totaled $75 billion in the second quarter of 2026, the second-highest quarterly figure on record and up 22% from the previous quarter, according to the Clean Investment Monitor, a joint project of Rhodium Group and MIT’s Center for Energy and Environmental Policy Research.
The supply chain has amped up, too. By the third quarter of this year, manufacturing capacity for solar modules, wind blades and nacelles had expanded by roughly 50% from the first quarter of 2025, reflecting new facilities that have come online, the CIM reported in October. And over the past four quarters, $277 billion was invested across the country in the manufacture and deployment of renewable energy, non-fossil fuel vehicles, building electrification and carbon-management technology.
“Investment has consistently been very strong in solar and storage at the utility scale,” said Hannah Hess, director, energy and climate at Rhodium. That makes sense from a bottom-line perspective, she said, “particularly when some of the deadlines for these projects have changed for them to be eligible for tax credits.”
Hess is referring to provisions in the One Big Beautiful Bill Act, which significantly hastened the sunsets and deadlines for federal clean energy tax credits compared to the original timeline set by the Biden administration’s Inflation Reduction Act. Solar and wind projects had to begin construction by July 4 of this year or be placed into service by December 31, 2027, to claim standard investment or production tax credits.
‘A rich time to be looking at this space’
Meanwhile, even with the Trump administration’s concerted efforts to rescind much of the $1.6 trillion set aside for clean energy under Biden’s Bipartisan Infrastructure Law and the IRA, nearly $600 billion remains available, according to a Politico analysis. Keeping that third of the funding pipeline open bodes well for clean energy developers and investors, especially considering the midterm results.
“Despite the gutting of the IRA, our long-term thesis and our clients’ long-term views on clean energy remain the same,” said Roraj Pradhananga, chief investment officer at Veris Wealth Partners, an advisory firm that specializes in impact investing. “If we look at the volatility and risk-adjusted returns of the traditional energy sector, in the long run, shifting to renewable energy makes the most (economic) sense,” even when taking the tax credits out of the equation, he said.
Veris manages $3 billion across asset classes, Pradhananga said, using various vehicles, including public markets, private debt and infrastructure funds. “Climate solutions tend to be the largest allocation for our clients. We recently allocated to strategies from GPs like Closed Loop Partners, Streetlife Ventures, SJF Ventures, New Energy Capital and Sunwealth.”
The proliferation of AI data centers was a hot-button issue in the midterms. Voters in 10 states weighed in on 41 local initiatives, which included complete bans on new construction, pausing ongoing and planned facilities and restrictions on energy consumption. All but one passed. And although newly elected governors in three states — Ohio, Texas and Georgia — ran on platforms critical of data centers, they’re not calling for permanent bans.
For instance, Gina Hinojosa, governor-elect of Texas, said during a CNN interview on November 5, “We will have laws to protect Texans, and we need to stop what we are doing with data centers until we have those protections.” She also emphasized giving local communities a meaningful say in whether and how facilities operate. That echoes Pennsylvania Governor Josh Shapiro’s cautious approach to data center development in that state. In August, he issued an executive order that places a host of restrictions on developers.
The upshot for AI companies may be a slowdown in new data center construction, increased input from local residents and officials, and self-financing for electricity and water usage. Yet they are not expected to change their long-term expansion plans. A few days before the election, Goldman Sachs said, “While U.S. data center development faces increasing political and community opposition, project data and our updated capacity estimates suggest that the…growth outlook through 2027 remains largely unchanged.” The Wall Street firm forecast data center power demand to grow 38% or 12 GW in 2026 and 38% or 17 GW in 2027.
On Friday, OpenAI’s CFO told CNBC the company will not be changing its investment plans despite the election results. White House economic advisor Kevin Hassett expressed a similarly optimistic view of continued investing on CNBC on Friday. “We respect the localities that decide that’s what they want to do,” Hassett said. “But America is a big place, and right now, the data centers scheduled over the next couple of years aren’t affected by these ballot initiatives.”
From another perspective, the risks associated with AI and data centers could be beneficial to renewable energy investments. “If anything, sustainability concerns around AI actually reinforce their interest in climate action,” Lai said. “The growth in AI and data centers could drive significant new fossil fuel generation, so our clients are motivated to ensure that more of that (electricity) demand is met by renewables.”
That’s true for many of Veris’ clients, too, Pradhananga said. But he also acknowledged that because natural gas is a prominent fuel source for large-scale utilities, as well as behind-the-meter LNG turbines that power many data centers, “there are some (of our) clients who view this as part of the transition” from fossil fuels to renewables, espousing the often-mentioned “all of the above” approach to the changeover. “This is where we do have exposure to utilities in (our) public markets portfolio.”
Public consternation over data centers, a Democratic-controlled Congress come January and, at least for now, a voting map across the country that has swung significantly towards the Democratic Party ahead of the 2028 presidential election, could create a trifecta of tailwinds for investors in renewable energy and clean-tech. And while any moratorium on data centers could impact renewable project development on a case-by-case basis, it might also promote investments in transmission grid upgrades that allow utility-scale solar and wind installations to tie into existing and proposed data centers.
It could also speed up research and development of emissions-free power generation, energy-efficiency and other technologies that climate-tech VCs are funding. Due to the AI boom, renewable energy companies have faced stiffer competition in recent years for venture capital dollars previously targeting climate change and decarbonization. But climate-tech VC hit $26 billion in the first half of 2026, a 55% increase year over year, according to market-intelligence firm Currence.
“There are very interesting infrastructure opportunities in (climate investing), including advanced fusion ventures, floating offshore wind turbines and solar plus storage operations,” said Adam Wolfensohn, a clean-energy investment advocate and advisor. “All of these technologies keep getting better and cheaper, unlocking so much more potential for renewables and new financial structures. It’s a rich time to be looking at this space.”
Among the guiding resources the GIIN offers to its 350 member organizations in 40-plus countries, including 126 in the U.S., is a recently launched climate solutions investing framework. “It’s designed to help investors make sense of the landscape of climate solutions and to ensure they have rigor around the actual climate impacts underpinning an investment strategy,” Bouri said. “A lot of things have green labels on them, but what we are really focused on is what drives real results for people and the planet.”
