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Renewable power shares whipsawed on Monday as new revisions to Donald Trump’s spending plan created a division of haves and have-nots in the future of US clean energy.
The amendments would raise costs for wind and solar developers that source parts from China but would create exemptions for some residential solar companies, reflecting the administration’s antipathy towards renewable energy but preference for American manufacturing. Companies that build industrial-scale wind and solar would be hit hardest, while those that lease out solar systems to homeowners would have their access to tax credits extended.
Shares in NextEra, a power company, were down 4 per cent, while Primoris, an energy construction company, lost 2 per cent. Enphase Energy, a solar and battery technology manufacturer, lost 3 per cent.
Meanwhile, shares in First Solar rose 9 per cent and Sunrun gained 11 per cent.
Clean energy companies were surprised by the weekend amendments, including a new tax on solar and wind projects if they were to use too high a proportion of Chinese components.
The new text also requires solar and wind projects to be operational by the end of 2027 to qualify for tax credits, a potential hurdle that would require them to secure time-consuming permitting and grid connection before the deadline. The language was added back to the draft after being removed from an earlier version.
“This is a full-on legislative assault on wind and solar,” said John Miller, an energy transition analyst at TD Securities.
Residential solar stocks were buoyed by a last-minute reprieve that would extend the timeframe for companies such as Sunrun to continue claiming an investment tax credit for clean electricity projects such as solar, wind and battery storage.
American manufacturers such as First Solar benefited from the bill’s penalties on purchases of Chinese-made goods.
Analysts at Jefferies said the changes were “incrementally positive” for domestic residential solar providers.
The US Senate will begin to vote on amendments later on Monday, following a narrow vote to start debating the legislation wrapped up over the weekend.
Since the bill’s text was first released, the clean energy industry has embarked on a lobbying blitz to persuade Republican lawmakers whose districts have benefited from investment spurred by the Biden-era Inflation Reduction Act.
“The clean energy investor community is extremely concerned about what Congress is doing,” said Frank Macchiarola, chief advocacy officer of the American Clean Power Association. “For the last three years, we’ve seen significant investment and development of clean energy, which has meant incredible job creation in Republican states and districts.”
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