Solar Shares Fall as GOP Targets Earlier End to Tax Credits

Contractors install SunRun Inc. solar panels on the roof of a new home at the Westline Homes Willowood Cottages community in Sacramento, California, U.S., on Wednesday, Aug. 15, 2018. California is the first state in the U.S. to require solar panels on almost all new homes as part of a mandate to take effect in 2020. Photo by David Paul Morris /Bloomberg

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(Bloomberg) — Shares of solar companies slumped after conservative Republican lawmakers said they had secured a commitment from leadership to end key clean-energy tax credits earlier than planned, part of a sweeping deal aimed at allowing President Donald Trump’s giant tax and spending package to advance. 

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Sunrun Inc. fell as much as 8% Monday, and Enphase Energy Inc. was down as much as 5.3%. First Solar Inc. declined as much as 6.8%. 

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Despite surging clean-energy installations in recent years, the drop shows that the industry still relies heavily on favorable policy support from Washington.

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South Carolina Representative Ralph Norman, one of four ultraconservatives negotiating the package, said House leadership had agreed to a proposal to end Inflation Reduction Act tax credits earlier than Republicans’ original proposal. As initially unveiled, many energy credits, including a tax incentive for clean energy production, would begin to phase out in 2029, ending in 2032. Norman didn’t provide a new time frame. 

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House Republican leadership staff told reporters Monday that a phase-out date hadn’t been decided, and it remained to be seen if it would cover shovel-ready projects.

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The incentives, which include credits for electric vehicles, wind and solar power, nuclear power and other sources of clean energy, have been ripe targets for lawmakers looking for hundreds of billions of dollars to help pay for extending Trump’s tax cuts. 

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But there is no guarantee the deep cuts being proposed will become law. Moderate Republicans in the House, where Speaker Mike Johnson can only afford to lose a handful of votes, have called for him to make the cuts less onerous. Some Republican senators have said they don’t support the changes as is in the current House tax proposal.

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Representative Chip Roy, a Texas Republican and budget hawk who has previously said his support is contingent on the “full eradication of Green New Deal IRA subsidies,” said in a post on X Sunday that he still wasn’t satisfied. 

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“Importantly the bill now will move Medicaid work requirements forward and reduces the availability of future subsidies,” Roy said. “But, the bill does not yet meet the moment – leaving almost half of the green new scam subsidies continuing.”

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—With assistance from Erik Wasson and Jarrell Dillard.

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(Updates with details starting in sixth paragraph.)

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