It’s been a terrible ride for solar stocks this year.
Heightened interest rates, surprise bankruptcies, and political gut punches have dished out a monumental beating on solar energy plays.
💵💰Don’t miss the move: Subscribe to TheStreet’s free daily newsletter💰💵
However, if Wall Street’s whiplash this week says anything, this industry still has a ton of fight.
A fresh twist in D.C. has given beaten-down solar stocks a jolt of hope, though whether it sticks is another story altogether.
Image source: Shutterstock
Solar energy stocks endure brutal year
Since January, the biggest names in solar have been under relentless pressure.
Higher borrowing costs have slammed solar projects this year, leading to multiple bankruptcies from Sunnova to Solar Mosaic. Also, state moves like California’s NEM 3.0 net-metering shakeup compounded sector woes.
The cracks in the residential and community solar setups were laid bare by essentially gutting resale values.
Consequently, we’ve seen the Invesco Solar ETF (TAN) lagging the broader market by roughly a third, while major players like First Solar (FSLR) , Enphase (ENPH) , and Sunrun (RUN) are trading deep in the red.
Related: Solar stocks sent reeling by Congress
Then came the massive policy earthquake.
Senate Republicans slipped into the latest tax-and-spending bill an amendment to phase out all solar and wind tax credits by 2028.
Those incentives include the 30% federal Investment Tax Credit for rooftop systems, and the Production Tax Credits (plus transferable ITCs) have effectively laid the foundation for solar’s economics.
More on Tech:
- Veteran Tesla analyst makes boldest robotaxi call yet
- Apple could make big change to Siri, delight fans
- Veteran analyst offers eye-popping Nvidia, Microsoft stock prediction
Without them, it undercuts developers’ ability to secure financing while shrinking project returns in the process.
Following the announcement, solar stocks plunged. In one brutal session, TAN nosedived about 10%, breaking below $32 while Enphase Energy skidded 26%.
Similarly, Sunrun stock collapsed 42%, flirting with penny-stock territory, and First Solar tumbled 18%.
Hence, Washington’s push to kill off solar incentives has put the whole industry on notice.
A twist on July 1 has thrown the sector a lifeline, though, at least for now.
Senate drops excise tax, sparking sharp rally in solar stocks
Solar stocks flipped from panic selling to a surprise rebound in virtually no time.
Out of nowhere, Senate dealmakers decided to scrap that excise tax, which slapped hefty fees on panels with certain foreign parts.
Late on July 1, the Senate signed off on the amended “Big Beautiful Bill,” President Trump’s big tax-and-spend plan. Surprisingly, it excluded the dreaded excise tax on solar and wind projects.
GOP leaders were said to have scrapped it in cooling tensions on the Hill, flipping the market’s mood from panic to relief.
The bounce was emphatic.
TAN stock led the charge, and individual stocks lit up the tape.
Shoals Technologies leapt more than 18%, while Array Technologies added about 11%.
Sunrun stock climbed 8.5%, and SolarEdge rose nearly 8%.
Similarly, Enphase Energy and Maxeon Solar saw roughly 3% to 3.5% bumps.
Surprisingly, even the larger utilities like NextEra Energy, Canadian Solar, and JinkoSolar popped by 2% to 3%.
First Solar was the lone laggard, slipping a fraction.
Related: Cathie Wood makes surprising chip bet as AI battle heats up
Here’s the downer: This quick fix didn’t return the long-term tax credits that keep most clean-energy projects alive.
Solar and wind tax perks will still start phasing out in 2026 and will go away by 2028, which means any new project needs to be up and running by the end of 2027 to cash in.
Meanwhile, nuclear got its sweet deal until 2036, and hydrogen hangs on through 2028.
Accordingly, industry leaders aren’t exactly popping champagne, calling the development a temporary respite.
Abigail Ross Hopper, who heads the Solar Energy Industries Association, said this does nothing about the bigger problem. Credits continue to dry up, and there’s still not enough funds to help with local solar manufacturing.
Now, the tweaked bill heads to a razor-thin House vote, which will shed more light on the future of American clean energy.
On July 2, key solar stocks were firmly in the green during regular trading. TAN is up more than 6.2%, First Solar has jumped almost 9%, and Sunrun is up nearly 3%.
Related: Tesla stock sinks fast as Musk-Trump clash turns ugly
