Donald Trump's victory in the presidential election Tuesday sent renewable stocks tumbling this week as investors digested what his win will mean for the industry.

But despite Trump's campaign promises to end offshore wind energy projects "on day one" and rescind unused funds from the Inflation Reduction Act's low-carbon initiatives, worries over an energy transition slowdown may be overblown, industry watchers say.

"It’s important to differentiate between campaign rhetoric and actual reality of governing," Raymond James managing director Pavel Molchanov told Yahoo Finance.

On Friday the iShares Global Clean Energy ETF (ICLN) was headed for a weekly loss of 7% while the Invesco Solar ETF (TAN) slid 10% for the week. The renewable sector was already in decline this year amid stubbornly high interest rates and election uncertainty.

"Of course all these companies ... would prefer a Democrat in the White House just as a matter of sentiment and investor psychology," said Molchanov.

But the analyst says investors' "knee-jerk reaction" over the president-elect's promises to promote fossil fuels while rolling back green energies is giving too much credence to what a Trump 2.0 administration can do.

Many of the current tax credits or subsidies for everything from wind and solar to battery making, biofuels, carbon capture, and hydrogen benefit Republican states in terms of jobs and investments.

‘Eliminating any of it will risk a backlash in the midterm elections in two years,” said Ed Hirs, senior fellow at the University of Houston.

Over the summer, more than a dozen House Republicans from regions including battleground states Georgia, Nevada, and Arizona sent a letter to Speaker Mike Johnson asking him not to target energy incentives if the lower chamber maintains or expands its majority next year.

"This is kind of an unknown as to how much appetite Republicans are going to have to retain tax credits that have benefited their constituencies. Because once you have a tax credit, it’s really hard to unwind it," said Philip Rossetti, resident senior fellow for the energy policy program at center right-leaning think tank R Street Institute.

Rossetti also pointed to booming energy demand to power AI data centers from deep-pocketed Big Tech, which makes ongoing investments in the sector likely.

"They're often willing to pay a premium if they're able to say that their data center is carbon neutral," said Rossetti. "I expect that to continue under Trump."