Trump's "One Big Beautiful Bill Act" Ends Clean Energy Tax Breaks, Solar Stocks Plummet While Nuclear Stocks Surge

TradingKey - On Thursday, May 22nd, U.S. solar stocks experienced an intraday plunge as President Trump's tax bill slashed tax credits for clean energy, more aggressively than anticipated.

The House narrowly passed the bill with a vote of 215-214, aiming to prematurely end clean energy tax credits, which were a cornerstone of former President Biden's Inflation Reduction Act (IRA).

The investment tax credit, known as 48E, was originally set to phase out by the end of 2031. However, the new legislation accelerates this timeline, bringing the termination forward to 2028.

On Thursday, the U.S. renewable energy sector fell for the second consecutive day. The residential solar industry was particularly hard hit, as the new bill reduced tax credits for homeowners purchasing solar systems. Residential solar installer Sunrun plummeted nearly 40%, while Enphase and SolarEdge, which provide solar system products, fell approximately 20% and 25%, respectively. The largest U.S. renewable energy developer, NextEra Energy, closed down 6.4%.

In contrast, nuclear stocks received a "reprieve" as tax credits impacting the nuclear industry were not targeted. Shares in small modular reactor company Oklo surged 8% in response.

Additionally, on May 23rd, Trump is set to sign an executive order aimed at promoting the nuclear energy industry, leading to after-hours gains in U.S. nuclear stocks. Lightbridge rose over 22%, Oklo climbed more than 18%, and NuScale Power increased over 16% after hours.

Analysts suggest that green energy stocks may continue to decline. Manish Kabra, head of U.S. equity strategy at Société Générale, noted the lack of a compelling reason to hold U.S. solar companies, as one of this administration's priorities is eliminating green subsidies.