Solar stocks plummet as Senate version of Trump’s tax bill cuts renewable energy incentives

Solar stocks were under pressure Tuesday as the U.S. Senate’s version of President Donald Trump’s spending bill kept cuts to renewable energy incentives.

Shares of Enphase Energy plummeted more than 17% in the premarket, while First Solar dipped about 12%. Sunrun slipped more than 27% and SolarEdge Technologies dropped 22%.

The Senate version of the bill includes a provision that would fully phase out both solar and wind power tax incentives by 2028. It does, however, keep incentives for nuclear, hydropower and geothermal energy for longer. The renewable energy incentives were key pillars of former President Joe Biden’s Inflation Reduction Act.

“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,” wrote Raymond James Washington policy analyst Ed Mills. However, “wind and solar eligibility continue to see pressure in the Senate-passed version.”

Republicans in the Senate want to move fast to pass the bill before the Fourth of July holiday. The tax legislation also raises the debt limit to $5 trillion from $4 trillion.

“We continue to view the July 4 target as ambitious given pending Byrd Rule decisions and potential amendments. With Republicans holding a narrow 53-47 majority, defections could force concessions, particularly on SALT and Medicaid provisions,” Mills said. “Unless the Senate is able to pre-negotiate provisions, the Senate will then reconcile differences with the House version through the conference process, likely extending into late July.”