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Solar stocks are on track to close out the week with steep losses as Wall Street assesses last-minute changes slipped into the tax-and-spending bill approved by the House this week.
Bottom line: The bill is a threat to the industry.
SolarEdge (SEDG), Sunrun (RUN), Complete Solaria (SPWR), and Enphase Energy (ENPH) were among the biggest decliners this week. All were down by double-digit percentages despite a mild relief rally in the sector on Friday.
Most of the damage came after the House passed Trump's "big, beautiful bill," which proposes ending key investment and production tax credits from the Biden-era Inflation Reduction Act three years earlier than Wall Street expected. The bill also requires eligible wind and solar projects to begin construction within 60 days of becoming law.
While analysts believe the current version of the bill is unlikely to survive intact in the Senate, the prospect of tighter restrictions has spooked investors.
To be finalized and signed into law in its current form — that would create a lot of disruption and layoffs, project cancellations, potentially bankruptcies," Raymond James investment strategy analyst Pavel Molchanov told Yahoo Finance.
Molchanov expects the industry to ramp up lobbying efforts in the coming weeks to persuade the Senate to roll back the more severe provisions. Key senators representing states with large solar and wind industries are also likely to push for a more measured approach.
"Dialing back these last-minute modifications from the last 48 hours, that would be a victory from the perspective of solar and wind," he added. Molchanov noted that the US installed a record 38 gigawatts of solar capacity last year; further records were in sight this year.
"After the tax credit expires — whenever that may be — there will be a decline in the amount of wind and solar installations. Will it go to zero? No, absolutely not," he added. "There will always be solar and wind projects getting built. It's just a matter of how many."
The clean energy industry has had a volatile year as elevated interest rates have kept borrowing costs high. President Trump's return to the White House has added pressure to the sector, with his administration talking down green energy initiatives in favor of fossil fuels.
On the manufacturing side, companies involved with batteries and panels have leaned into plans to onshore operations in response to Trump's tariff policies.
In a move welcomed by the solar sector, the US Department of Commerce announced plans to impose tariffs as high as 3,521% on panel imports from four Southeast Asian countries.
