Clean energy stocks experienced a boost on Tuesday following the removal of a proposed tax on solar and wind projects from the Senate version of the One Big Beautiful Bill Act. Shares of NextEra Energy, the leading developer of renewable energy in the United States, surged approximately 5% after the Senate tentatively approved President Donald Trump’s legislation. Similarly, AES, a prominent renewable energy provider, saw an increase of around 2%.
Earlier in the week, the clean energy sector was blindsided by the introduction of a tax on wind and solar projects, which targeted operations using components from foreign entities of concern, primarily identified as China. This unexpected measure caused significant outrage within the industry, as it threatened to levy an additional tax burden of up to $7 billion on clean energy initiatives.
However, the tax was eliminated as part of the final Senate legislation, a decision applauded by advocacy groups such as the American Clean Power Association (ACP) and the Solar Energy Industries Association (SEIA). John Hensley, ACP’s senior vice president for market analysis, highlighted the punitive nature of the tax, emphasizing its potential negative impact on the sector.
Despite the favorable removal of the tax, the bill still proposes a phase-out of the clean electricity investment and production tax credits for wind and solar energy, albeit with a less stringent timeline compared to earlier drafts. These credits are vital for fostering renewable energy growth in the U.S. Importantly, projects that commence construction within a year of the bill’s enactment can still access the full tax credits. For initiatives starting after that one-year window, they must be operational by the end of 2027 to qualify for the benefits.
The cleaner energy landscape continues to evolve amid legislative changes, presenting both challenges and opportunities for growth. This development reflects a growing recognition of the importance of renewable energy for the future. The hopeful outlook for the sector highlights the ongoing commitment to clean energy solutions, which are increasingly seen as essential for a sustainable economic and environmental future.