U.S. Senate Narrowly Passes Tax Bill in 51:50 Vote, Drops Proposed New Energy Tax, Clean Energy Stocks Surge with Shoals Up 23.88%

TradingKey - In a narrow 51 to 50 vote, the U.S. Senate passed the tax bill on Tuesday, July 1st, Eastern Time, notably omitting the previously contentious provision imposing new consumption taxes on wind and solar projects. This development sent U.S. clean energy stocks soaring.

Prior revisions to the Senate version of the tax bill included several critical amendments. These proposed imposing new consumption taxes if a certain percentage of components for wind and solar projects originated from China. Additionally, the cancellation date for subsidies on clean energy projects was significantly advanced to the end of 2027, and tax credits for electric vehicle purchases were set to terminate after September.

These amendments garnered support from some U.S. manufacturers who argued for reduced reliance on China's clean energy supply chain but also sparked concern within the clean energy industry.

Had the consumption tax been implemented, the American Clean Power Association (ACP) estimated that U.S. clean energy companies would face additional costs of $4 to $7 billion over the next decade. Moreover, research firm Rhodium Group projected a 10% to 20% increase in construction costs for wind and solar energy.

By midday Tuesday, upon the Senate's final approval of the tax-cut bill without the new energy consumption tax, solar stocks experienced significant gains.

Residential solar installer Sunrun (RUN) surged over 10% at midday, closing up 10.51%. Shoals Technologies (SHLS), a provider of balance-of-system solutions for solar projects, closed up 23.88%. Solar tracker manufacturers Array Technologies (ARRY) and Nextracker (NXT) saw their stocks rise by 12.54% and 5.79% respectively. Solar inverter giant SolarEdge (SEDG) also closed up 7.16%. NextEra Energy (NEE), the largest renewable energy developer in the U.S., saw its stock price increase by 5.24%.