Solar Stocks Likely To Face Heat As Senate Bill Seeks To Slash Tax Credits, Impose Taxes On Renewable Projects

Solar stocks are expected to be on retail watch on Monday after the Senate version of the Republicans' ‘Big Beautiful Bill’ is seeking to rapidly end incentives for solar and wind projects and impose a special tax on those projects for the first time.

The latest move by the upper house of the U.S. Congress would present significant challenges to the renewable industry, which desperately needs the inflation reduction credits for scores of upcoming megaprojects across the country.

The bill will rapidly wind down the Inflation Reduction Act tax incentives for most renewable projects by 2027. It would also impose a new tax on wind and solar projects completed after Dec. 31, 2027, if they fail to prove that the projects did not include any Chinese components.

“Where the original Senate version was a recipe for energy stagnation, this is outright energy surrender—all but guaranteeing Chinese dominance of critical minerals, industrial supply chains, and AI development,” a non-partisan energy security firm, SAFE, said.

U.S. President Donald Trump has set a deadline to pass the bill by July 4. However, it still faces opposition in both houses of Congress, as more hawkish Republicans want steeper cuts in the flagship bill, including Medicaid.

Tesla CEO Elon Musk, who was with Trump’s Department of Government Efficiency to reduce wasteful spending, lambasted the bill on X, saying it will result in the loss of millions of American jobs.

"It is utterly insane and destructive. It gives handouts to industries of the past while severely damaging industries of the future," he said on X.

Retail sentiment about top domestic panel manufacturer  First Solar  was in the ‘bearish’ territory.

First Solar and Enphase Energy stocks have declined 14.5% and 41%, respectively, this year, while SolarEdge Technologies' stock has gained over 41%.

Also See: China’s Manufacturing Activity Declines 3 Months In A Row, But New Orders Show Glimmer Of Hope

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