Shares of major U.S. solar energy companies plunged in after-hours trading on Monday after Senate Republicans proposed changes to President Donald Trump’s tax and spending bill that would eliminate key clean energy incentives. The proposed legislation, dubbed the "One Big Beautiful Bill Act," seeks to phase out tax credits for solar and wind energy by 2028, accelerating the timeline set by the Biden-era Inflation Reduction Act.
Enphase Energy (NASDAQ:ENPH), a leading solar inverter maker, saw its shares fall 15% post-market. Solar panel providers Sunrun (NASDAQ:RUN) and SolarEdge Technologies (NASDAQ:SEDG) dropped more than 20%, while First Solar (NASDAQ:FSLR) declined 9%.
In contrast, the bill extends tax incentives for hydroelectric, nuclear, and geothermal energy through 2036, aligning with priorities favored by the Trump administration. The proposed changes will be debated further as Senate Republicans aim to pass the legislation before the July 4 holiday.
The news adds to the challenges facing the U.S. solar sector, which has been grappling with declining residential demand due to elevated interest rates and net metering reforms in key markets like California. These changes have reduced the financial benefits for homeowners selling surplus solar power back to the grid, further dampening consumer enthusiasm.
Investors reacted sharply to the policy shift, concerned that phasing out solar tax credits could weaken long-term growth prospects for renewable energy companies. As the Senate moves toward finalizing the bill, clean energy stakeholders are closely watching for any amendments that might soften the blow to the solar industry.
The selloff underscores how vulnerable the sector remains to shifts in federal policy, particularly as the energy transition continues to depend heavily on supportive legislation.