European clean energy stocks saw a significant drop after Donald Trump’s victory in the US presidential election, Reuters reported.

The win sparked concerns among investors about the future of US renewable energy support and climate policy.

The market reacted to Trump's promises to halt offshore wind projects and roll back climate regulations established by Joe Biden, including exiting the Paris Agreement and potentially reversing the Inflation Reduction Act's clean energy incentives.

Shares of offshore wind developer Ørsted plunged by up to 14%, while wind turbine manufacturers Vestas and Nordex saw their stocks decline by approximately 11% and 7.6%, respectively.

The US renewables market, a crucial growth area for several European utilities, faces uncertainty as Trump's policy changes could affect projects, especially offshore wind developments, not expected to be operational until 2029 or later.

According to analysts at Deutsche Bank, the renewable energy market in the US represents a significant growth opportunity for various European utility companies, including Portugal's EDP Renováveis, Ørsted, and Germany's energy provider RWE.

“A full repeal of the IRA would depend on Congress, although significant changes might be possible," Deutsche Bank wrote in a note to clients.

Despite the market's reaction, companies such as Vestas and Ørsted had previously expressed confidence that US demand for green energy would persist irrespective of the election outcome.

Similarly, a Nordex spokesperson conveyed optimism for the US onshore wind market to Reuters, though they acknowledged potential delays due to the prevailing uncertainty.

Industry experts from Power Technology’s parent company, GlobalData, have recently explained what is to come for the power sector industry following the elections.

Trump’s return to the White House is expected to mark a sharp pivot towards fossil fuels.