The "Big and Beautiful Act" cancels consumption tax on wind and solar energy projects, U.S. solar stocks surge in response
The U.S. Senate passed Trump's tax and spending bill, eliminating the consumption tax on wind and solar projects, leading to a surge in U.S. solar stocks. Shoals Technologies rose nearly 24%, and Array Technologies increased by nearly 13%. Although some manufacturers support this tax policy, renewable energy developers are concerned about rising costs. The bill stipulates a gradual phase-out of tax credits starting in 2026, with a complete elimination by 2028. The president of the Solar Energy Industries Association stated that the bill could lead to higher electricity prices and unemployment. The bill passed in the Senate by a vote of 51 to 50, and the House still needs to overcome resistance
According to Zhitong Finance APP, after several days of intense negotiations, the U.S. Senate passed the latest tax and spending bill from President Trump, with the Republicans canceling the consumption tax on wind and solar projects at the last minute. As a result, U.S. solar stocks surged on Tuesday.
As of Tuesday's market close, Shoals Technologies (SHLS.US) rose nearly 24%, Array Technologies (ARRY.US) rose nearly 13%, Sunrun (RUN.US) rose nearly 11%, Fluence Energy (FLNC.US) rose over 9%, SolarEdge Technologies (SEDG.US) rose over 7%, and Nextracker (NXT.US) rose nearly 6%.
Some U.S. manufacturers support the proposed tax, stating that the U.S. needs to reduce its dependence on China's clean energy supply chain. However, this policy has raised concerns among renewable energy developers, who claim it could increase the costs of solar and wind power plants, as these plants still rely on some foreign components and a China-dominated supply chain.
The bill still stipulates a gradual phase-out of tax credits for solar and wind energy starting in 2026, with a complete elimination by 2028, and requires solar or wind projects to be operational by the end of 2027 to qualify for tax credits; nuclear power tax credits will last until 2036, and hydrogen tax credits will be eliminated by 2028.
Abigail Ross Hopper, president of the Solar Energy Industries Association, stated in a press release: "While this bill has improved, it undermines the foundation of U.S. manufacturing recovery and global energy leadership. If this bill becomes law, households will face higher electricity bills, factories will close, Americans will lose jobs, and our power grid will become more vulnerable."
It is understood that Trump's "Big and Beautiful Act" passed the Senate on Tuesday by a narrow margin of 51 to 50, but it still faces significant obstacles in the House of Representatives. Given that some Republican lawmakers have expressed concerns about the bill's impact on the fiscal deficit, this task will be quite challenging. According to estimates from the nonpartisan Congressional Budget Office (CBO), the bill will increase the U.S. federal deficit by at least $3 trillion over the next decade
