In a year when some governments are rolling back their commitments to fighting climate change, it may be surprising to see that stocks closely associated with renewable energy are having a moment.

Companies that generate or develop wind, solar and hydroelectric power are rising – and offering a fascinating check on U.S. political leadership that has turned the fight against climate change on its head.

U.S. President Donald Trump has delivered an agenda that favours fossil fuels, while hampering the expansion of wind and solar energy. In one of his more provocative moves, his administration in August halted work on a near-complete offshore wind farm near Rhode Island.

Canada is not in the same league, but the new government under Prime Minister Mark Carney appears to be emphasizing economic strength over environmental concerns.

His government has dropped the 2026 minimum sales requirement for electric vehicles and has vowed to make Canada an “energy superpower” – including clean energy and fossil fuels – through faster approval for major infrastructure projects.

Investors may be having second thoughts about whether renewable energy can survive this political shift.

But look what’s happening in the stock market.

The iShares Global Clean Energy ETF XCLN-T, an exchange-traded fund that holds stocks associated with wind, solar and hydroelectricity generation, has rebounded 30 per cent since the start of 2025.

The fund has significantly outperformed the S&P 500 and has left the index’s conventional energy sector – a group of companies that Mr. Trump has championed – in the dust.

From a Canadian perspective, the BMO Clean Energy Index ETF ZCLN-T is up 25 per cent this year. The fund has outpaced the S&P/TSX Energy Index TTEN – dominated by the likes of Canadian Natural Resources Ltd. CNQ-T and Suncor Energy Inc. SU-T – by about 18 percentage points over the same period.

How can this be?

One thing to keep in mind is that renewable energy stocks were beaten up from 2021 until early this year, as inflation and cost overruns shredded profits.

Prior to this year’s rebound, the iShares Global Clean Energy ETF was down more than 65 per cent from its 2021 peak. This year’s rebound is from depressed lows.

Another consideration is that clean energy is a global sector. While the U.S. might be unconcerned with climate change, many countries – including China and Saudi Arabia – are moving ahead with ambitious plans to expand renewable energy.

Lastly, and perhaps most importantly: Power demand is surging with data centres, EVs and advanced manufacturing. Some observers believe that renewable energy is essential to meeting this rising demand.

A report this week from Ryan Levine, an analyst at Citigroup, put some eye-opening numbers to the potential here.

He expects that U.S. electricity demand will rise by 3.2 per cent a year through 2030, when growth will taper to 2.6 per cent a year through the early 2030s.

For slow-moving electricity demand, that’s really something. Consider that over the past decade, U.S. demand crept up by just 0.5 per cent a year, according to Mr. Levine.

To handle this increase, the Citigroup analyst expects that capacity for natural gas generation will rise by 96 gigawatts and nuclear expansion will rise by 54 gigawatts.

Here’s the big take-away: Mr. Levine expects that electricity generation from renewables will rise by a whopping 940 gigawatts. That’s nearly 10 times the expected growth from fossil fuels, and reflects the fact that solar and wind are cost-effective resources that do not have to be discovered, extracted and refined.

Today’s rebound in renewable energy stocks may be a response to something that is bigger than politics: The world needs more electricity, and renewable energy sources offer a compelling way to get it.

Is today’s fraught political environment affecting how you invest or changing your outlook? Let me know at dberman@globeandmail.com.