US Senate Passes Bill Excluding New Tax on Solar and Wind Projects, Boosting Solar Stocks

The US Senate passed a tax and spending bill excluding a proposed new consumption tax on imported components for wind and solar projects, benefiting the clean energy sector. Solar stocks surged, with Sunrun, NextEra Energy, Array Technologies, and Nextracker experiencing gains of up to 10%. The Invesco Solar ETF and iShares Global Clean Energy ETF also rose, but the American Clean Power Association remains cautious, noting potential harm to the renewable energy sector.

The U.S. Senate passed a tax and spending bill, excluding a proposed new consumption tax on imported components for wind and solar projects. This move significantly benefits the clean energy sector, leading to a surge in solar stocks. Key players such as Sunrun, NextEra Energy, Array Technologies, and Nextracker experienced gains of up to 10% following the Senate's decision.

The American Clean Power Association (ACP) remains cautious, noting potential harm to the renewable energy sector. The Senate bill still phases out investment and electricity production tax credits, which have historically supported the growth of solar and wind power in the U.S. The ACP described the bill as "a step backward for American energy policy."

The Senate bill, known as the One Big Beautiful Bill Act, was passed narrowly on Tuesday and will now be considered by the House of Representatives. The bill's passage in the Senate came after a last-minute removal of the excise tax that would have imposed a burden on wind and solar energy projects using components from prohibited foreign countries, such as China.

The excise tax was designed to boost domestic manufacturing but was deemed cost-prohibitive for developing projects around Chinese components. The removal of this tax is likely to ensure Republican Sen. Lisa Murkowski of Alaska's support for the measure.

The Senate bill also made another key concession: it would phase out wind and solar tax credits for clean energy development on a slower timeline than originally proposed. Projects that have already been planned, financed, and approved would still receive the applicable tax credit as long as they begin construction before June 2026 or are operational by the end of 2027.

However, environmental groups express concern about the bill's impact on clean energy production and energy efficiency. The bill largely terminates numerous tax incentives from the 2022 Inflation Reduction Act, which benefited consumers.

A new analysis by the Center for Climate and Energy Solutions predicted that the changes in the Senate bill would eliminate more than 1.6 million jobs, cause more than $290 billion in lost GDP, increase U.S. greenhouse gas emissions by 8% by 2035, and increase the cost of energy by 4% per megawatt.

The bill now returns to the House, where Speaker Mike Johnson is intent on meeting Republicans' self-imposed July 4 deadline to get the bill to President Trump's desk. To do so, the House will have to pass the Senate version unchanged. Any alteration would mean the bill would have to be considered by a conference committee to reconcile the differences.

References:
[1] https://www.cbsnews.com/news/senate-removes-excise-tax-renewable-energy-industry-trump-domestic-policy-bill/
[2] https://www.cnbc.com/2025/07/01/solar-wind-clean-energy-trump-big-beautiful-bill-ira-tax-credit.html
[3] https://www.livemint.com/industry/the-renewable-energy-sector-s-relative-winners-and-losers-in-the-megabill-11751381666854.html