Solar stocks are plummeting as the Senate version of Trump's 'big beautiful bill' hits clean energy

• Solar stocks tumbled on Tuesday, with Solar Edge and First Solar down sharply.
• The Senate version of the GOP budget bill keeps cuts to clean energy in place.
• The new government policy would phase out solar and wind energy tax credits.

— Samuel O'Brient

Solar energy stocks plunged for a second day on Tuesday, on news that the Senate version of the budget bill retains cuts to renewable energy tax credits.

A US Senate panel has proposed fully phasing out all tax credits for solar and wind energy within the next three years. The development swiftly sent solar energy stocks into free fall, including First Solar, SolarEdge and Sunrun.

First Solar fell as much as 22%, while SolarEdge declined as much as 42%, and Sunrun dropped 44%.

The proposed tax policy changes are part of the Senate's version of President Donald Trump's "One Big Beautiful Bill Act," a budget package that was recently passed in the House of Representatives.

Under the current policy, passed during the Biden administration's Inflation Reduction Act in 2022, subsidies for solar and wind energy would remain in place until 2032. But the new vision outlined by Republican officials includes granting 100% of the tax credits to hydropower, nuclear, and geothermal energy, areas of the energy sector that the Trump administration favors.

Republican Senator Mike Crapo, who serves as founder and co-chairman of the Senate Nuclear Cleanup Caucus, has released a text summary of the bill, which promises to eliminate billions of dollars of clean energy subsidies, describing them as unnecessary and highlighting the need to prioritize other energy sources.

These changes have been met with blowback from the clean energy industry, whose advocates have touted the economic consequences of eliminating solar and wind subsidies.

This list includes Ari Matusiak, CEO of clean energy nonprofit Rewiring America, who has stated that "Eliminating the tax credits that save families money is a profound mistake."

Ed Mills, a managing director and Washington policy analyst for Raymond James, notes that "While the Senate proposal still represents a material negative for renewable energy investment/names, it is a significant improvement from the House."

So far, though, the "material negative" seems to be outweighing any improvements for solar stocks.

And the corner of the energy sector could have further to fall if the Senate proposal moves forward. It stands to not just eliminate billions of dollars in subsidies that have allowed the renewable power industry to grow, but to provide them to companies that produce competing energy sources.