May 23 Solar stocks saw a partial recovery Friday after sharp losses a day earlier, as Senate opposition grew against proposed clean energy rollbacks in the House's tax and spending bill.
Sunrun (NASDAQ:RUN) jumped about 12% and SolarEdge Technologies (NASDAQ:SEDG) rose nearly 11% after falling 37% and 24% on Thursday, respectively. Enphase Energy (NASDAQ:ENPH) climbed around 5%, while First Solar (NASDAQ:FSLR), Fluence Energy (NASDAQ:FLNC), Array Technologies (NASDAQ:ARRY), and Maxeon Solar Technologies (NASDAQ:MAXN) each gained 2% or more.
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Wells Fargo analysts said the House bill presents a "worst-case scenario" for the residential solar industry, with Sunrun among the most impacted. The legislation shifts tax credits from the 48E structure to 25D, potentially lowering cash generation and making third-party-owned solar systems more expensive in several states.
The bill would also end rooftop solar credits this year and shorten incentives for utility-scale solar and wind projects to 2028. However, analysts noted utility-scale solar providers like Nextracker (NASDAQ:NXT) and First Solar may remain more resilient due to project economics and preserved 45X credits.
The Senate is expected to make changes, with several Republican lawmakers signaling opposition to the bill's steep clean energy cuts.
This article first appeared on GuruFocus.