Solar Stocks Hit Hard by GOP Tax Plan Targeting Green Incentives

Solar stocks dropped sharply in Thursday morning trade after House Republicans passed a tax package that would end several clean energy credits, including key provisions from the Inflation Reduction Act.

Sunrun (RUN), one of the largest residential solar installers in the U.S., fell nearly 40%. The proposed legislation eliminates tax incentives for companies that lease rooftop systems to customers — a core part of Sunrun’s business model.

After today’s downturn, Sunrun’s stock has fallen over 30% for the year. 

Enphase Energy (ENPH) slid 16%, while SolarEdge Technologies (SEDG) dropped 24%. Both companies specialize in rooftop solar technologies. Shares of solar tracking equipment makers also declined, with Array Technologies (ARRY) falling 13% and Nextracker (NXT) down 6%.

Despite the slide, Nextracker’s stock remains up 47% in 2025, while SolarEdge’s shares are still 8% higher year-to-date. Enphase’s stock, by contrast, is down more than 44% for the year. Array shares posted a modest 4% gain in that period.

Mizuho analyst Maheep Mandloi said the accelerated timeline for phasing out tax credits was partly anticipated, as per TheFly. However, he noted that stricter language targeting projects linked to “foreign entities of concern” and a 2026–2028 sunset window for related incentives represent a more serious threat to the sector.

Under the revised bill, technology-neutral tax credits for solar, wind, and battery storage are scheduled to end entirely in 2028. While First Solar (FSLR) was viewed as a relative winner — its shares fell only 3% — Mandloi said the broader shift in policy is likely to weigh on long-term demand across the industry. 

First Solar, which manufactures panels in the U.S., is less exposed to China-linked supply chains and retains access to domestic manufacturing credits.

First Solar’s stock remains down by 13% year-to-date.

Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association, issued a strongly worded statement following the House vote. She warned that the legislation threatens hundreds of billions in investment, U.S. energy independence, and the viability of the domestic grid.

“If this bill becomes law, America will effectively surrender the AI race to China, and communities nationwide will face blackouts,” Hopper said. “It’s not too late for Congress to get this right. The solar and storage industry is ready to work with the U.S. Senate on a more thoughtful and measured approach.”

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