Solar energy stocks faced significant declines on Tuesday as the U.S. Senate’s proposed spending bill, associated with President Donald Trump, maintained cuts to incentives for renewable energy. Enphase Energy saw its shares fall over 17% in premarket trading, while First Solar dropped approximately 12%. Sunrun experienced a more drastic decline of over 27%, and SolarEdge Technologies fell by 22%.
The Senate proposal plans to eliminate tax incentives for both solar and wind energy by 2028, although it retains support for nuclear, hydropower, and geothermal energy for extended periods. This decision has drawn attention as the incentives for renewable energy were integral to the Inflation Reduction Act introduced by former President Joe Biden.
Ed Mills, a Washington policy analyst at Raymond James, commented on the situation, stating, “The House-passed version generally represented a worst-case scenario for the majority of the IRA’s tax incentives; while the Senate proposal still represents a material negative for renewable energy investment/names, it is a significant improvement from the House.” Despite this, Mills highlighted ongoing pressure on wind and solar eligibility in the Senate’s version.
As the landscape for renewable energy funding remains uncertain, stakeholders may focus on advocating for robust policies that support green energy. It’s essential to recognize the long-term benefits of investing in sustainable energy sources, which could lead to future growth opportunities despite the current challenges.