KEY TAKEAWAYS
- Solar stocks are tumbling after the Senate maintained the full removal of clean-energy tax credits in the budget bill, even as it extended the time frame for the phaseout beyond the House’s bill.
- Citi said it would stick to its sell rating on residential solar stocks, and expects a “sharp pullback” in shares of SunRun, SolarEdge Technologies, and Enphase Energy.
- Those solar shares are all plunging between 17% and 35% in premarket trading.
Solar stocks are tumbling after the Senate maintained the full removal of clean-energy tax credits in the budget bill, even as it reportedly extended the time frame for the phaseout beyond the House’s bill.
Shares of SunRun (RUN) are tumbling more than 35% in premarket trading, SolarEdge Technologies (SEDG) is plunging 30%, Enphase Energy (ENPH) is falling 18%, and First Solar (FSLR) is down 17%.
Solar stocks were hammered last month after the House passed a tax and spending bill that would end tax credits for wind and solar projects in 2029, years earlier than a previous version of the bill. Citi analysts said Tuesday that the measures in the Senate’s bill were “a slight improvement” on the previous plan to terminate credits for projects that weren’t in place by the end of 2028 “but is far more restrictive than the original bill’s phase out starting in 2029 and elimination of credits in 2032.”
The analysts stuck to their sell rating on residential solar stocks, adding they expected a “sharp pullback” in shares of SunRun, SolarEdge Technologies, and Enphase Energy. The analysts said that the Senate bill “also creates significant headwinds for storage” stocks like Enphase, SolarEdge and Fluence Energy (FLNC). Fluence shares were up 6% in premarket trading.
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