On June 17, 2025, solar stocks faced a significant downturn as the U.S. Senate proposed a bill that substantially reduces tax incentives for the sector.
Trump’s New Tax Bill
The Senate version of Trump’s tax bill includes provisions to completely phase out tax incentives for solar and wind power by 2028, marking a serious blow to the renewable energy sector. Unlike earlier versions, this legislation maintains support for nuclear, hydropower, and geothermal energy, demonstrating a clear preference for traditional and alternative technologies over solar and wind.
Market Reaction
The market responded swiftly to the proposed changes, with leading solar companies experiencing huge losses. Enphase Energy fell over 24%, Sunrun more than 27%, and SolarEdge Technologies dropped 22%. Even major players like First Solar were affected by the selloff.
Long-term Implications for the Sector
Performance data from the sector indicates that the solar industry recorded a 13.99% decline year-to-date, while the S&P 500 showed positive growth. Support for other clean energy sources, such as electric vehicles, is also under threat as the Senate looks to eliminate credits for these as well.
The proposed changes in tax legislation could severely impact project financing and timelines within the solar sector, posing challenges for renewable energy in the future.
