Senate Bill Threatens U.S. Solar, Wind Sectors with Tax Cuts, New Charges

The U.S. Senate is poised to vote on a tax and spending package, championed by President Donald Trump, that would significantly reduce tax credits for solar and wind energy projects by requiring these projects to be operational by 2027 to qualify for incentives, with a steep phase-out thereafter. The bill also introduces a new excise tax on renewable projects using components sourced from China, which analysts warn could disrupt supply chains and raise costs, while favoring domestic producers like First Solar. These measures have sparked sharp declines in renewable energy stocks, including major developers like NextEra Energy and component suppliers such as Enphase, while coal companies have seen gains amid the potential shift away from clean energy incentives. Industry experts and figures like Tesla CEO Elon Musk have condemned the bill as destructive and harmful to the future of American clean energy jobs and innovation. The legislation threatens to reverse the momentum gained from the Inflation Reduction Act of 2022, which had been a key driver in expanding the U.S. clean energy sector. Despite the bill's support from some Republicans, it faces opposition within Congress, and its potential passage could lead to higher electricity costs and diminished U.S. competitiveness in renewable energy markets.