Solar Stocks Shine Despite OBBBA: TAN ETF Outperforms XLE and S&P 500 Amid Favorable Manufacturing Provisions

Solar stocks have outperformed oil and gas benchmarks since the passage of the "One Big Beautiful Bill Act," which rolled back some clean energy credits. Despite this, the solar sector has seen robust demand in the US and globally. The Invesco Solar ETF has returned 10.9% YTD, while the Energy Select Sector SPDR Fund has lost 0.7%. First Solar is a key beneficiary of OBBBA, with UBS reiterating its Buy rating and hiking its price target to $275, citing the company's domestic manufacturing expansion and tax credit benefits.

Solar stocks have shown remarkable resilience and growth since the passage of the "One Big Beautiful Bill Act" (OBBBA), which rolled back some clean energy credits. Despite this, the solar sector has witnessed robust demand in the U.S. and globally. The Invesco Solar ETF has returned 10.9% year-to-date (YTD), while the Energy Select Sector SPDR Fund has lost 0.7% [1].

The Invesco Solar ETF's performance underscores the sector's strong fundamentals and investor confidence. First Solar, a key beneficiary of OBBBA, has seen its stock price rise due to the company's domestic manufacturing expansion and tax credit benefits. UBS reiterated its Buy rating and hiked its price target to $275, citing these factors [2].

The OBBBA, which was signed into law by President Donald Trump on July 4, 2025, repeals or restricts major clean energy tax credits enacted under the Inflation Reduction Act. The bill has generated political risk for developers of renewable energy projects, including solar. However, the solar sector's performance suggests that the market has adapted and continues to thrive.

The Trump administration's actions, such as pausing offshore wind projects and withdrawing approval for alternative energy projects, have added uncertainty to the renewable energy landscape. Despite these challenges, solar stocks have remained resilient, driven by factors such as technological advancements, cost reductions, and growing demand for clean energy.

Investors should continue to monitor the political climate and regulatory developments, as they can significantly impact the renewable energy sector. Companies engaged in solar projects should consider purchasing political risk insurance (PRI) to mitigate potential financial losses due to political changes or government instability [3].

In conclusion, solar stocks have outperformed oil and gas benchmarks since the passage of OBBBA, demonstrating the sector's resilience and growth potential. While political risks remain, the solar industry's strong fundamentals and investor confidence suggest that it will continue to thrive.

References:
[1] https://www.utilitydive.com/news/political-risk-trump-renewable-energy-projects-pri/757247/
[2] https://www.ainvest.com/news/liberty-media-q2-2025-revenue-41-strong-formula-1-performance-strategic-moves-2508/