Trump's return to the White House resulted in large-scale selling of wind power stocks, with financial institutions short selling the industry profiting over $1.2 billion.

According to the data from the short selling trade and retail trade data supplier Breakout Point, U.S. Arrowstreet Capital, UK Qube Research & Technologies, etc., have established short positions against Norwegian hydrogen company Nel and German wind turbine manufacturer Nordex.

Due to concerns from the public, the incoming U.S. President Trump may 'terminate' the Biden government's Inflation Reduction Act, stop tax credits for renewable energy, and halt offshore wind power development. The stock prices of the companies shorted dropped significantly on Wednesday.

In the U.S. stock market, hydrogen fuel cell companies $Plug Power (PLUG.US)$ and solar energy companies $Sunrun (RUN.US)$ On Wednesday, single-day drops of 22% and 30% respectively. According to S3 Partners' data, these two US stocks together brought short sellers about $0.35 billion in profits.

S3's data shows that funds made over $1.2 billion by shorting the 20 largest renewable energy stocks in the US and Europe.

Analysts believe that the clean energy industry has always been a hot target for short sellers because high inflation and high interest rates have put pressure on these companies whose stock prices soared in the early stages of the pandemic. The concerns have significantly escalated after the probability of Trump's return to the White House rose during the year.

Deepa Venkateswaran, Managing Director of Utilities and Clean Energy Research at Bernstein, said, "People are uneasy about the outlook for the US election results. It will only be in the coming months that we will know the actual content of (Trump's) policies."

Unlike solar and onshore wind power, offshore wind projects need approval from the federal government. In May this year, Trump declared that if he won the November election, he would end the US offshore wind projects on his "first day" in office and terminate the subsidies provided under the "Inflation Reduction Act".

Eirik Hogner, an executive at investment management firm Clean Energy Transition, stated that renewable energy has been in trouble for a "long time" and investors have lost patience with many stocks in the sector.

"Every stock in the basket on Wednesday collapsed. Because everyone remembers how significant the impact was on the industry when the 'Inflation Reduction Act' was first introduced."

It is worth mentioning that on November 5, the day before the US election, executives from the Danish offshore wind giant Orsted and wind turbine manufacturer Vestas told the media that the employment opportunities created by the renewable energy industry in the 'Red States' of America will play a key role.

Vestas CEO Henrik Andersen added that statements made by Trump during the election campaign may not be implemented after taking office, "Sometimes these comments are political rhetoric, and we need to see how they actually play out."

But Michelle Davis, Global Solar Research Director at Wood Mackenzie, expects that the 'Inflation Reduction Act' will be "significantly modified", and in the worst case scenario of significant changes in tax credits, renewable energy capacity additions over the next decade could decrease by one-third.

Analysts at the Royal Bank of Canada also warned that the permit process for future offshore wind projects may be halted by US federal agencies.

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