Solar stocks plunge after House passes revised tax bill

Shares of solar stocks are sliding on Thursday after House Republicans passed President Donald Trump’s revised tax bill, which some see as a worse than feared scenario as the GOP bill cuts renewable incentives for solar, wind, and batteries, among other clean energy areas. 

TAX BILL: Republicans in the U.S. House of Representatives came together to pass President Donald Trump’s “big, beautiful” tax bill out of the chamber on a narrow vote, with a final tally of 215-214. All Democrats on the floor voted no, as did Republican Reps. Warren Davidson of Ohio and Thomas Massie of Kentucky, with Rep. Andy Harris, R-Md., voting present. The GOP bill cuts renewable incentives for solar, wind, batteries, among others., and also ends the investment and electricity production credits for clean energy facilities that begin construction 60 days after the legislation is enacted or enter service after Dec. 31, 2028.

In a statement on the passage of reconciliation legislation by the U.S. House of Representatives, Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association, said that, “If Congress does not change course, this legislation will upend an economic boom in this country that has delivered an historic American manufacturing renaissance, lower electric bills, hundreds of thousands of good-paying jobs, and tens of billions of dollars of investments primarily to states that voted for President Trump. This unworkable legislation is willfully ignorant of the fact that deploying solar and storage is the only way the U.S. power grid can meet the demand of American consumers, businesses, and innovation. If this bill becomes law, America will effectively surrender the AI race to China and communities nationwide will face blackouts. But that’s not all: Americans’ electric bills will soar. Hundreds of factories will close. Hundreds of billions of dollars in local investments will vanish. Hundreds of thousands of people will lose their jobs. Families will lose the freedom to control their energy costs. And our electric grid will be destabilized. It’s not too late for Congress to get this right. The solar and storage industry is ready to get to work with the U.S. Senate on a more thoughtful and measured approach to unleashing true American energy dominance to create a brighter future for all Americans.”

NEGATIVE FOR THE WHOLE INDUSTRY: Mizuho says the House cut renewable incentives for solar, wind and batteries in the tech-neutral tax credits to now end completely in 2028, and pulled forward the anti-China policy timeline. The “key winner” was First Solar in this version, but the anti-China policy is negative for demand and the whole industry, the firm tells investors in a research note. Mizuho’s checks at the CleanPower conference expect positive changes for the industry in the Senate version of the bill. The faster Inflation Reduction Act cut-off is in line with news earlier this week but the stricter timeline and language on foreign entity of concern to get the tax credits 2026 to 2028 is the “bigger industry challenge,” according to the firm. 

SELL SUNRUN: BMO Capital downgraded Sunrun to Underperform from Market Perform with a price target of $4, down from $9. The firm says revisions to President Trump’s “One Big Beautiful Bill Act” suggest Sunrun’s ability to claim the solar investment tax credit on residential solar leases under Section 48E in fiscal 2026 and beyond is in jeopardy. While the bill is not finalized and could undergo multiple iterations in the Senate, with the elimination of section 25D residential credits in last week’s draft, there is limited political will to claw back residential credits in any Senate version, the firm tells investors in a research note. BMO says that with over 90% of Sunrun’s customers under third-party ownership structures whereby homeowners’ lease or rent their solar equipment and the company retains tax credits, the termination of 48E for residential solar leases is a “material risk” to the company’s business model.

PRICE ACTION: In Thursday morning trading, shares of SunRun (RUN) plunged over 39%, Enphase (ENPH) fell almost 19%, SolarEdge (SEDG) dropped about 26%, Arry (ARRY) slipped 12.5%, FTC Solar (FTCI), SunPower (SPWR) and Maxeon Solar (MAXN) slid about 7%, and Emeren (SOL) and Shoals Technologies (SHLS) fell more than 6% apiece. Also lower were First Solar (FSLR), Canadian Solar (CSIQ), and JinkoSolar (JKS).