The S&P Global Clean Energy Transition Index returned 9.3% in the 12 months to 7 October and 5.3% in 2026 to date, according to MoneyWeek. Those figures mask a sharp reversal: the index was up 43.9% year-to-date at its 2 June peak and has since fallen 26.8%.
US policy has weighed on the sector. Angeline Ong, senior investment analyst at IG, said the administration has paid developers close to $4 billion across deals with TotalEnergies, Golden State Wind, Bluepoint Wind, Invenergy and RWE since March 2026 to stop projects, with the aim understood by markets to be discouraging wind expansion in favour of fossil fuels. BP cut annual transition spending to $1.5-2 billion, more than $5 billion below prior guidance, and scrapped its target to shrink oil and gas output by 2030, while Shell has leaned harder into liquid natural gas and trimmed low-carbon spending.
Energy security has returned to the agenda. Charlie Wright, investment director at Foresight Group, said the conflict in Iran reminded investors that domestic renewables reduce reliance on imported fossil fuels. Brent Crude rose 38.8% between 27 February and 6 October, and diesel prices breached £2 per litre in recent days.
The International Energy Agency says renewables are on track to overtake coal as the largest source of electricity generation in 2026, with their share of global generation projected to rise from 33% in 2025 to 37% in 2027. Ong said solar and battery storage are comparatively insulated from higher inflation and interest rates because build times are shorter, and are thriving on AI-demand.
In the UK, Wright said the last two years have brought more headwinds within core renewables than at any time in the last 10-15 years, including lower power prices than assumed when historical projects were assessed and weaker years for wind and solar generation. In January, the government announced the renewables obligation scheme will account for inflation using the consumer prices index rather than the retail prices index, reducing long-term subsidies.
Wright views the setbacks as minor. "Wind and solar are still absolutely fundamental asset classes for decarbonisation in the UK," he said, adding that hitting net zero targets requires a lot more wind and solar to be built.