Recent changes in U.S. tax legislation have led to a significant drop in solar company stocks, raising concerns in the renewable energy sector.
Sharp Decline in Solar Stocks
Shares of Enphase Energy fell over 17%, First Solar dropped by 12%, Sunrun plummeted more than 27%, and SolarEdge Technologies decreased by 22%. This sharp decline occurred after investors learned about the proposal that includes a complete phaseout of tax credits for solar and wind energy by 2028.
Issues in the Tax Bill
The Senate version of Trump's tax bill proposes to maintain tax incentives for nuclear, hydropower, and geothermal energy while rejecting support for solar energy. These incentives were a key part of Joe Biden's climate plan. The revelation of this information triggered a selloff in solar stocks amid investor concerns.
Responses from Republicans and Democrats
Republicans are aiming to pass the bill before Independence Day; however, some party members have expressed concerns. Senator Josh Hawley warned about potential negative impacts on rural hospitals. Senator Mike Crapo confirmed the importance of swift passage of the bill to implement Trump's economic agenda. In response, Democrats are preparing to combat the bill, claiming it harms the working class.
The decline of solar stocks highlights the vulnerability of the sector in light of political changes. The negative consequences for renewable energy sources could significantly impact the industry's future.
