Shares of solar companies, including Sunrun, Inc. (NASDAQ:RUN), SolarEdge Technologies, Inc. (NASDAQ:SEDG), Enphase Energy, Inc. (NASDAQ:ENPH) and Array Technologies, Inc. (NASDAQ:ARRY) tumbled in early trading as investors digested the consequences of President Donald Trump's sweeping budget and tax package dubbed “One Big, Beautiful Bill."
What To Know: Republican representatives advanced a bill that included dramatic rollbacks of clean energy tax credits and incentives that had previously driven growth in the green energy sector.
The bill would end the 30% federal tax credit for residential solar installations and accelerate the phaseout of investment and production tax credits for utility-scale solar projects.
A new analysis released by the Solar Energy Industries Association warns that the budget bill could trigger an immediate decline in solar and storage investments, potentially resulting in up to $220 billion in investment loss by 2030.
Read Next: Wolfspeed Stock Plunges 59% On Bankruptcy Fears – Options Traders Cash In
BMO Capital analyst Ameet Thakkar downgraded Sunrun stock on Thursday from Market Perform to Underperform and slashed the price target from $9 to $4 as the outlook for the solar industry dimmed.
Companies with a strong U.S. manufacturing base, like First Solar, Inc. (NASDAQ:FSLR), were less affected by the bill, which leaves manufacturing tax credits largely intact.
Why It Matters: The so-called “One Big Beautiful Bill” threatens the solar industry with both the loss of direct incentives and the anticipated drop in demand for rooftop and utility-scale solar projects.
The bill now moves to the Senate, where lawmakers could propose changes. As the legislative process unfolds, the solar industry faces uncertainty and elevated risk.
Read Next:
Image: Shutterstock