US Solar Stocks Rise Amid Favorable New Subsidy Rules

US solar energy company shares surged following the Trump administration's announcement of new subsidy rules, which were less stringent than anticipated. The Treasury Department refined the definition of what constitutes a solar or wind project as under construction, mandating physical work completion rather than mere capital investment. Analysts and investors found the new guidelines favorable, with the MAC Global Solar Energy index rising by 4% and leading companies like Sunrun and First Solar experiencing significant gains.

US solar energy company shares experienced a notable increase following the Trump administration's announcement of new subsidy rules, which were less stringent than anticipated. The Treasury Department refined the definition of what constitutes a solar or wind project as under construction, mandating physical work completion rather than mere capital investment [1]. This update has been seen as favorable by analysts and investors, with the MAC Global Solar Energy index rising by 4% and leading companies like Sunrun and First Solar experiencing significant gains [2].

The new rules require utility-scale projects to demonstrate substantial and continuous physical work to qualify for the 30% tax credits, but they still have four years to claim them. This is a change from the previous requirement that allowed project developers to "safe harbor" projects for four years by incurring 5% of total costs before a credit expired or stepped down to a lesser value [1]. The Solar Energy Industries Association (SEIA) expressed concerns that the new rules would harm businesses and delay the buildout of affordable, reliable power [1].

First Solar shares jumped 9% Monday after UBS named the solar panel maker a top pick, pointing to the fresh IRS guidance that largely preserved 2030 tax credits for the industry [3]. The decision clears a cloud that has hung over the solar sector for more than a year. UBS analysts see First Solar's adjusted earnings growing to $32 per share by 2027, up from $12 per share last year [3]. Sunrun, a residential solar company, also saw an increase of 9% following the announcement [2].

The new guidelines maintain the existing four-year window for projects that commence construction before the credits expire. The One Big Beautiful Bill Act, signed into law on 4 July 2025, stipulates that projects must begin construction by July of the following year or become operational by the end of 2027 to qualify for the 30% tax credit, along with potential bonuses that could enhance the subsidy further [1].

In summary, the Trump administration's new subsidy rules have been received positively by the solar energy industry, leading to an increase in company shares. The refined definition of what constitutes a solar or wind project under construction, along with the maintained four-year window for claiming credits, has been seen as favorable by analysts and investors.

References:
[1] https://energy.economictimes.indiatimes.com/news/renewable/trump-administration-tightens-rules-on-solar-and-wind-tax-subsidies/123331361
[2] https://finance.yahoo.com/news/shares-us-solar-energy-companies-133907801.html
[3] https://sherwood.news/markets/first-solar-shines-after-ubs-says-new-tax-guidance-brightens-clean-energy/