Renewable energy stocks in the U.S. saw a decline in early trading on Tuesday after President Donald Trump signed an executive order aimed at tightening regulations that curb or eliminate tax incentives for solar and wind energy projects.
Enphase Energy (NASDAQ:ENPH) shares dropped about 1.8% before the market opened, while SolarEdge Technologies (NASDAQ:SEDG) fell 3.5%.
Trump criticized renewable energy sources as costly and inconsistent, asserting they are replacing more reliable, “dispatchable” energy options. He also expressed concerns over national security risks due to heavy reliance on foreign supply chains and warned that these projects could harm both the environment and the stability of the power grid.
The executive order directs the Treasury Department to enforce the phaseout of solar and wind tax credits outlined in the extensive tax legislation Trump signed last week. Meanwhile, the Interior Department has been instructed to review and potentially revise policies that currently favor renewable or alternative energy sources.
Both departments must submit progress reports on their policy changes within 45 days.
“President Trump is dedicated to advancing American energy independence and ensuring taxpayer dollars are not wasted on costly and unreliable energy programs,” the order states.
The recent tax and spending legislation, passed by Republican lawmakers after intense negotiations, gradually reduces tax credits for renewable projects starting construction after 2026. Previously, developers could claim a 30% credit through 2032.
Independent analysts have warned that the bill—which also extends Trump’s 2017 tax cuts, introduces new tax breaks, and boosts funding for defense and border security—could add over $3 trillion to the existing $36.2 trillion national debt. The White House has contested these estimates.