June 17 - Solar stocks slumped in after-hours trading Monday following proposed changes to a Senate tax bill that would phase out credits for wind and solar energy by 2028.
Sunrun (RUN) sank 28%, Solaredge Technologies (SEDG, Financial) fell 22%, and Enphase Energy (ENPH, Financial) dropped 16% after the Senate Finance Committee, led by Republicans, released its draft of President Trump's tax and spending plan. The revisions eliminate key tax breaks that have supported the U.S. solar industry.
Array Technologies (ARRY, Financial) lost 10%, while Shoals Technologies (SHLS, Financial) and Nextracker (NXT, Financial) declined 8% and 7%, respectively. Maxeon Solar Technologies (MAXN, Financial) and AES Corp. (AES, Financial) both slid more than 5%. First Solar (FSLR, Financial), which analysts believe is less exposed to the changes, fell 7%.
The updated legislation offers longer-term support for hydro, nuclear, and geothermal energy through 2036 but reduces flexibility for solar projects. Under the Senate version, projects must begin construction within 60 days of the bill's passage and be operational by the end of 2028 to qualify for credits.
“This proposal would pull the plug on homegrown solar energy,” said Solar Energy Industries Association President Abigail Ross Hopper, warning that the bill may hurt U.S. manufacturers and drive up energy prices over the next five years.
Solar equities can be volatile by the interest rates, supply chain pressures that recently gave a hit hard. And many solar companies have very thin margins that make them difficult to navigate challenges during hard times.
But for the long term, we still need solar energy for electrification, and don't forget about the climate policy for clean energy and incentives such as the U.S. Inflation Reduction Act or EU Green Deal provisions that support solar energy companies.
