What Happened?
A number of stocks fell in the morning session after a U.S. Senate panel proposed phasing out solar and wind energy tax credits by 2028, raising concerns about future profitability and project viability for solar companies. The phasing out is expected to begin as early as 2026, diminishing the financial incentives that have been critical drivers of growth in the renewable energy sector.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Renewable Energy company Sunrun (NASDAQ: RUN) fell 42.4%. Is now the time to buy Sunrun? Access our full analysis report here, it’s free.
- Renewable Energy company First Solar (NASDAQ: FSLR) fell 20.3%. Is now the time to buy First Solar? Access our full analysis report here, it’s free.
- Renewable Energy company SolarEdge (NASDAQ: SEDG) fell 40%. Is now the time to buy SolarEdge? Access our full analysis report here, it’s free.
Zooming In On Sunrun (RUN)
Sunrun’s shares are extremely volatile and have had 75 moves greater than 5% over the last year. But moves this big are rare even for Sunrun and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 21 days ago when the stock gained 6.1% after the major indices rebounded (Nasdaq +2.0%, S&P 500 +1.5%) as President Trump postponed the planned 50% tariff on European Union imports, shifting the start date to July 9, 2025. Companies with substantial business ties to Europe likely had some relief as the delay reduced near-term cost pressures and preserved cross-border demand.
Sunrun is down 45% since the beginning of the year, and at $5.62 per share, it is trading 73.9% below its 52-week high of $21.50 from August 2024. Investors who bought $1,000 worth of Sunrun’s shares 5 years ago would now be looking at an investment worth $291.29.
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