Shares in solar and renewable energy companies across the U.S. and Europe fell sharply on Tuesday following a Senate Republican proposal aimed at speeding up the phase-out of tax credits for wind and solar energy projects. The move disappointed clean energy advocates who had anticipated more generous support compared to the earlier cuts approved by the House of Representatives.
In the U.S., premarket trading showed Sunrun (NASDAQ:RUN) plummeting nearly 25%, while SolarEdge Technologies (NASDAQ:SEDG) and Enphase Energy (NASDAQ:ENPH) declined approximately 20% and 15%, respectively. European renewable stocks also suffered losses, with Orsted (LSE:10CF) down 1.2%, Nordex (TG:NDX1) slipping about 1%, and RWE (TG:RWE) falling 1.3%.
The Senate’s proposal removes the strict requirement that construction must start within 60 days to qualify for credits but maintains that tax incentives for wind and solar will end in 2028. In contrast, subsidies for nuclear, hydropower, and geothermal energy projects would continue, gradually phasing out by 2036.
This bill forms part of President Donald Trump’s broader economic plan, which seeks to roll back several provisions of the Inflation Reduction Act. One notable change would be the elimination of the $7,500 electric vehicle tax credit just 180 days after the bill becomes law, instead of the year-end deadline set by the House.
Additionally, the Senate bill proposes to remove the hydrogen production tax credit, valued at up to $3 per kilogram, despite heavy lobbying efforts by companies such as Plug Power (NASDAQ:PLUG) and other industry stakeholders.
The legislation also calls for the removal of incentives for both leased and owned rooftop solar installations, a change experts warn could deal a severe blow to the already fragile solar market. This ongoing policy uncertainty has contributed to the bankruptcy of Solar Mosaic, a leading solar financing company for homes.
Unlike the House version, the Senate bill retains tax credits for nuclear energy by eliminating the unrealistic 2028 deadline for starting construction.
Lawmakers aim to pass the Senate version and return it to the House for final approval before the July 4 recess, though further amendments may still be introduced.