Navigating Solar Headwinds: 3 Stocks Built to Last Despite OBBB Act

The One Big Beautiful Bill (OBBB) Act eliminates incentives for solar power, especially in residential areas, but the Senate version removed some onerous provisions. Three stocks that can still thrive include NextEra Energy, Enphase Energy, and Sunrun Inc. NextEra has a diversified renewables portfolio and can still benefit from the remaining tax credits, while Enphase Energy focuses on residential solar systems and can adapt to the new regulations. Sunrun Inc. is a leading residential solar provider and can still benefit from the remaining tax credits and growing demand for solar energy.

The One Big Beautiful Bill (OBBB) Act, signed into law on July 4, 2025, significantly alters the landscape of clean energy investment by rolling back tax incentives for wind and solar projects. The new law, which President Trump signed into effect, has set a compressed timeline for developers to either complete their projects by the end of 2027 or begin construction within the next 12 months to qualify for critical tax credits. This accelerated timeline is likely to force developers to expedite their project schedules or risk losing these incentives [1].

The OBBB has also introduced stringent foreign ownership and sourcing requirements, known as the "foreign entity of concern" (FEOC) rules, which deny tax credits to projects owned or controlled by certain foreign entities or those that purchase components from or make payments to these entities. Notably, the list of FEOCs includes companies owned or controlled by the Chinese government or its citizens [1].

While the OBBB has a more favorable outlook for newer clean energy technologies like battery storage and carbon capture, it also imposes stricter rules. Projects must now meet specific foreign ownership and sourcing requirements to qualify for tax credits. For instance, wind and solar projects that begin construction in 2026 or later must navigate complex FEOC sourcing and payment rules, including proving that an increasing share of components are sourced outside of China [1].

The OBBB has different implications for solar and wind projects. Projects that began construction before 2025 are largely unaffected, while those starting in 2025 or later must either begin construction before July 5, 2026, or be placed in service by December 31, 2027, to qualify for tax credits. This compressed timeline is a significant change from the pre-OBBB law, which allowed projects to be placed in service up to the end of 2029 or 2030, depending on the year of construction [1].

Despite these challenges, some stocks in the clean energy sector may still thrive. NextEra Energy, Enphase Energy, and Sunrun Inc. are three companies that could continue to perform well. NextEra, with its diversified renewables portfolio, can still benefit from the remaining tax credits. Enphase Energy, which focuses on residential solar systems, can adapt to the new regulations. Sunrun Inc., a leading residential solar provider, can still benefit from the remaining tax credits and the growing demand for solar energy [1].

In conclusion, the One Big Beautiful Bill Act has significantly altered the tax incentives for clean energy projects, particularly for wind and solar. While the law introduces new challenges, it also provides opportunities for certain companies and technologies to thrive. Investors and financial professionals should closely monitor these developments and consider the implications for their portfolios.

References:
[1] https://www.lw.com/en/insights/one-big-beautiful-bill-new-law-disrupts-clean-energy-investment