Trump 2.0: How Potential Policy Changes Could Impact Waaree Energies, Premier Energies

The Trump administration is expected to take action to weaken the Inflation Reduction Act, which was a significant climate legislation signed by the Biden government in August 2022.

This act aimed to transition to clean energy via tax incentives. But Trump's policy proposal to impose high import tariffs on China and the rest of the world can potentially impact solar module companies like Waaree Energies Ltd. and Premier Energies Ltd., which have a significant presence as solar exporters to the United States.

Around 50% of Waaree Energies' FY24 revenues came from the United States.

While Premier Energies is the largest solar cell exporter the US.

Three scenarios could take place with the potential policy change.

Scenario 1

The first could be an increase of solar import tariffs on India by the US, as well as a reduction in IRA incentives. This could impact Waaree Energies and Premier Energies negatively, as per Axis Securities.

Scenario 2

There could also be a case where there is no change in both, the IRA incentive and solar import tariffs by US. This would be the most beneficial for Indian module manufacturers like Waaree Energies and Premier Energies.

Scenario 3

Another scenario could be no change in IRA incentives, but an increase in import tariffs on India. This would make exports from India less viable, as per Axis Securities. Thus, a potential policy like this could have a slight negative impact on Waaree Energies and Premier Energies in the start.

However, it is key to note that a move like this would increase solar module prices in the US, compared to the rest of the world. This stands to benefit Waaree Energies and Premier Energies in the medium term due to their plans to set up local plants in the US.