JPMorgan says ‘proceed with caution’ in clean energy after House bill

JPMorgan analyst Mark Strouse says that following passage of the budget reconciliation bill in the House of Representatives last week that included “draconian cuts” to clean energy incentives, focus turns to the Senate where clean energy bulls “remain hopeful that positive revisions will be made.” Investors “should generally proceed with caution.” JPMorgan thinks the utility-scale sector is relatively better positioned than residential, though it adds the House bill is a “clear negative” overall for its clean energy coverage. The firm’s top picks are First Solar (FSLR) given the company’s above-average exposure to 45X, which was relatively unscathed in the House bill, and Brookfield Renewable Partners (BEP) HASI (HASI), which JPMorgan says provide investors with recurring cash flow from existing projects where incentives have already been monetized.