Sunrun ( (RUN) ) has fallen by -35.37%. Read on to learn why.
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Sunrun, a leading residential solar company, has experienced a dramatic stock price decline of 35.37% over the past week. This plunge is largely attributed to the proposed Senate Finance Committee bill that aims to cut solar tax credits, which have been a crucial part of Sunrun’s business model. The company has relied heavily on these credits to make solar installations financially viable for customers, and the potential removal of these incentives poses a significant threat to its profitability and market position.
The proposed legislation has sparked a broader market reaction, affecting other solar companies as well, but Sunrun has been particularly hard hit due to its reliance on the third-party ownership model. This model allows Sunrun to install and own solar panels, offering customers the option to lease or pay for the generated electricity. The elimination of tax credits would force Sunrun to absorb more costs, likely leading to higher prices for consumers and further financial strain on the company.
Despite the grim outlook, there is still hope for Sunrun as the bill faces opposition from Democrats and clean energy advocates. The legislative process is ongoing, and amendments could potentially mitigate the impact on Sunrun. However, the uncertainty surrounding the bill has led to a cautious stance among analysts, with some downgrading the stock and others recommending a wait-and-see approach until more regulatory clarity is achieved.