U.S. Senate Proposes Ending Solar, Wind Tax Credits by 2028

Senate Republicans have proposed a significant revision to President Donald Trump's tax and spending bill that would phase out solar and wind energy tax credits by 2028, accelerating the original timeline established under the 2022 Inflation Reduction Act. This proposal, part of a Republican-backed budget bill, also extends tax incentives for nuclear, hydropower, and geothermal energy through 2036, reflecting priorities favored by the Trump administration. The announcement led to a sharp decline in solar company shares, with major firms like Sunrun, SolarEdge Technologies, Enphase Energy, and First Solar experiencing losses ranging from 8% to over 27% in after-hours trading. While the Senate's draft offers more flexibility than the House's version—allowing projects to qualify based on construction start dates and maintaining the ability to transfer tax credits—it still removes consumer tax credits for rooftop solar and home energy upgrades, a move criticized by clean energy advocates. Industry leaders have mixed reactions: some praise the extension of incentives for other clean energy sources, while others warn that the phase-out jeopardizes the solar sector's growth and U.S. economic progress in renewable energy. Investors remain concerned about the long-term impact on the solar industry, which is already facing challenges from declining residential demand and policy uncertainties.