Solar Stocks Sink as Senate Targets Tax Credits

• The U.S. Senate’s “One Big Beautiful Bill” proposes phasing out solar and wind tax credits by 2028, starting with a reduction to 60% in 2026 and 20% in 2027, while ending the 30% residential solar credit within 180 days, causing sharp declines in solar stocks.
• Enphase Energy (ENPH) fell 23.91% to $34.95, SolarEdge Technologies (SEDG) dropped 35.90% to $15.37, SunRun (RUN) plummeted over 41% to $5.66, and First Solar (FSLR) declined 16.92% to $145.60, reflecting investor concerns about reduced clean energy incentives.
• The bill preserves full tax credits for hydroelectric, nuclear, and geothermal energy until 2033, with a phase-out by 2036, signaling a policy shift toward Trump-era energy priorities that could hinder solar industry growth.

The U.S. Senate’s proposed “One Big Beautiful Bill,” part of President Donald Trump’s budget initiative, has triggered a sharp sell-off in solar-power stocks, as it outlines a plan to phase out critical clean energy tax credits by 2028, significantly impacting the renewable energy sector. Shares of Enphase Energy Inc. (ENPH) plummeted 23.91% to $34.95, SolarEdge Technologies (SEDG) dropped 35.90% to $15.37, SunRun Inc. (RUN) fell over 41% to $5.66, and First Solar Inc. (FSLR) declined 16.92% to $145.60 in early trading on Tuesday. The bill’s aggressive rollback of incentives has raised concerns among industry leaders about the future of solar energy adoption in the United States.

The proposed legislation targets key clean energy incentives, with solar and wind tax credits facing a gradual reduction starting in 2026 at 60%, dropping to 20% in 2027, and being eliminated entirely by 2028. Additionally, the 30% tax credit for residential solar and battery installations, known as the 25D credit, would terminate just 180 days after the bill’s passage, posing a significant challenge for homeowners and businesses investing in solar solutions. In contrast, the bill favors other energy sources, preserving full tax credits for hydroelectric, nuclear, and geothermal projects until 2033, with a phase-out planned by 2036, signaling a shift toward Trump-era energy priorities that emphasize traditional and select renewable sources over solar and wind.

The solar industry, which has relied heavily on tax incentives to drive growth and affordability, faces a potential setback as these credits have been instrumental in reducing installation costs and boosting demand. Enphase Energy, a leader in solar microinverters, and SolarEdge, known for its solar power optimization systems, are particularly vulnerable due to their dependence on residential and commercial solar markets. SunRun, a major player in residential solar leasing, and First Solar, a prominent manufacturer of solar panels, also face heightened risks as the proposed cuts could dampen consumer interest and project financing. The simultaneous elimination of electric vehicle tax credits – within 180 days for new vehicles and 90 days for used ones – further underscores the bill’s broader pivot away from certain clean energy initiatives.

The market’s reaction reflects investor concerns about the solar industry’s growth prospects in a policy environment less supportive of renewables. Industry experts warn that phasing out these incentives could slow the transition to clean energy, increase costs for consumers, and hinder the U.S.’s progress toward reducing carbon emissions. While the bill’s passage remains uncertain, its introduction has already disrupted the renewable energy sector, prompting companies to reassess strategies and brace for a potential shift in market dynamics.

WallStreetPit does not provide investment advice. All rights reserved.

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