Trump climate cuts pummel 2 Bay Area companies for $2.3 billion in 1 day
The future of California’s solar industry suddenly looks a whole lot murkier.
The Senate Finance Committee released its text for President Donald Trump’s massive budget reconciliation bill on Monday, dashing clean energy industry hopes that the Senate might save tax breaks currently granted to solar and wind power. The tax breaks encourage companies to build renewable projects, help homeowners pay for solar panels and push more of the economy toward clean, often cheap energy. Trump’s Republican Party has now united around gutting those efforts.
Both chambers of Congress must vote on the budget bill’s final text before it goes to Trump’s desk, meaning these changes are not yet law. But the House’s version also killed the breaks. So for a solar industry already struggling with high interest rates and cutbacks to incentives in California, the country’s largest solar market, Monday’s news hit like a truck.
Sunrun, a San Francisco-headquartered company that leases solar power to residential customers over multiyear contracts, turned in unusually rosy financial results just over a month ago, with growing revenue and subsiding debts. But the Senate’s new draft text removes solar leasing from a clean energy production credit and phases out the credit for all solar and wind tech. Since Monday afternoon, Sunrun’s stock has plummeted about 40% in value, cutting more than $860 million from its market cap in just a single day.
The story is similar for Enphase Energy, a Fremont-headquartered maker of batteries and microinverters for solar installations. The company’s stock had been sliding since late 2022, but it’d had a fairly good month. Then came Monday. Enphase lost about 23% of its value, cutting the company from a valuation near $6 billion to one near $4.6 billion. Combined with Sunrun, that’s around $2.3 billion in value, up in smoke. Other public solar companies, like SolarEdge Technologies and First Solar, also had bad days.
Many of the incentives for renewable energy that Republicans are planning to cut were part of Joe Biden’s Inflation Reduction Act from 2022; a New York Times analysis found that the act spurred a wave of investment in wind farms, solar installations and battery factories. Along with endangering many of those projects, the new cuts could raise energy prices, critics argue.
Though some of the cuts would be rapid — the clean vehicle credit and residential clean energy credits would disappear after 180 days, per an official bill summary — the Senate committee did offer a little leeway. Wind and solar projects would have a few years to start up and still get some tax credits, and hydropower, nuclear and geothermal projects would have up to a decade to still get the breaks.
Idaho Republican Mike Crapo, who leads the Senate committee, praised the plan in a news release, writing that the legislation “achieves significant savings by slashing Green New Deal spending and targeting waste, fraud and abuse in spending programs while preserving and protecting them for the most vulnerable.”
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