Solar Stocks Slide as GOP Eyes Faster Rollback of Tax Breaks

• Solar stocks tumble as House conservatives press to end Inflation Reduction Act tax credits sooner, exposing industry reliance on federal incentives amid tense budget talks.

Wall Street’s renewable-energy darlings took a hit to start the week after hard-line House Republicans secured a promise to accelerate the sunset of clean-energy credits embedded in President Joe Biden’s Inflation Reduction Act. The policy shift, still far from certain, rattled investors who have grown accustomed to Washington’s generous support for solar, wind and other low-carbon technologies.

Shares of residential-solar installer Sunrun dropped more than 8 percent Monday, while microinverter pioneer Enphase Energy slid 5 percent. Utility-scale heavyweight First Solar sank nearly 7 percent before clawing back some ground by the closing bell. The sell-off underscored an uncomfortable reality for an industry that has posted record installations: federal incentives remain the cornerstone of project economics.

Representative Ralph Norman of South Carolina, one of four House Freedom Caucus members shaping the Republican tax-and-spending package, said leadership agreed to phase out key credits “earlier than 2029,” though he declined to name a new cutoff date. The original GOP draft had set a gradual reduction beginning that year, with all incentives ending by 2032. House leaders later told reporters that the final timeline was still under negotiation and might spare projects already in the construction queue.

Tax perks targeted for faster elimination include production credits for renewable electricity, investment credits for solar panels and batteries, and consumer incentives for electric vehicles. Slashing them could free up “hundreds of billions” to offset the cost of extending Trump-era individual tax cuts, according to Republican negotiators.

Yet the path to passage is anything but clear. Speaker Mike Johnson can afford to lose only a handful of votes in the narrowly divided House, and several moderate Republicans have warned that deep cuts to clean-energy programs could threaten jobs back home. Over in the Senate, GOP lawmakers such as Lisa Murkowski of Alaska have signaled discomfort with rolling back incentives that underpin multibillion-dollar investments in their states.

Texas Republican Chip Roy, a leading deficit hawk, insisted the current draft “does not yet meet the moment,” arguing that roughly half of what he calls “green-new-scam subsidies” would still survive. Negotiations are expected to stretch into June, with lobbyists for utilities, solar developers and automakers pushing to preserve at least part of the existing framework.

For now, the uncertainty alone is enough to jolt solar equities—proof that Capitol Hill’s next move can still make or break America’s clean-energy ambitions.