Many parts of the United States were sunny on Tuesday, but the happy situation did not expand significantly with solar energy stocks. A considerable number of people have won trading sessions on the latest developments in the legislative field.
That’s one of the industry’s victims. First Solar (FSLR) -17.77%))stock prices fell nearly 18%, dimming. That decline was much steeper than the 0.8% slip. S&P 500 Index that day.
Tax credits may end suddenly
President Trump’s big and beautiful bill is a massive bone of competition in Congress and has been the subject of much criticism and debate among lawmakers. It also makes a difference as senators adjust it with compromise efforts.
Image source: Getty Images.
On Tuesday, the Senate Finance Committee proposed speeding up the elimination of solar and wind energy tax credits. Under current law, these will not expire until 2032. Under the new proposal, they will be cut by 60% next year and will be completely eliminated in 2028.
This contrasts with the bill’s attitude towards tax credits on other forms of energy, particularly nuclear, hydroelectric power and geothermal. In its current form, the proposed law actually extends these credits to 2036.
The bull must remain bullish
While far more horse deals are likely to arrive before the Senate settles into the form of a bill that it could ultimately accept, renewables are almost certainly the target.
Investors are right to worry about the impact on solar and other types of green energy companies, but this feels like an overreaction. A good company in this segment should be able to adapt to the end of the tax credit.
Eric Volkmann has no position in any of the stocks mentioned. Motley Fools are located in the first solar and recommend. Motley Fools have a disclosure policy.
