Clean energy companies faced a significant sell-off after a new tax bill proposed in the United States triggered deep concerns across the renewable energy sector. Stocks of major US-based renewable energy firms such as Sunrun, the largest rooftop solar company in the country, and NextEra Energy, the leading developer of solar and wind energy projects, recorded sharp declines in a single trading session. Losses ranged between 7% and an alarming 37%, shaking investor confidence and dragging down broader sentiment around green energy investments.
The sharp fall followed the proposal of a controversial tax bill introduced by US President Donald Trump’s administration. This bill aims to roll back several initiatives implemented under the Biden-era Inflation Reduction Act, which was central to expanding green energy adoption across the US. Notably, the proposed legislation seeks to eliminate funding and incentives that were earlier provided to companies involved in developing and installing clean energy solutions. This includes the repeal of grants that support efforts to reduce air pollution, lower greenhouse gas emissions, and facilitate the purchase of electric heavy-duty vehicles, all of which have been instrumental in shaping the clean energy roadmap.
Among the key changes proposed, the bill intends to abolish the 30% federal tax credit that taxpayers currently enjoy when they install solar rooftop systems. This tax credit has been a critical driver for the rapid growth of residential solar installations in recent years. If this bill is passed, analysts believe it could drastically reduce the economic attractiveness of solar energy for homeowners, leading to a considerable drop in demand for rooftop solar systems.
The bill passed narrowly in the US House of Representatives, with a slim 215-214 margin, and now moves to the Senate for further deliberation. While its final outcome remains uncertain, the market has already reacted strongly to the potential implications. The proposed changes pose a direct threat to the clean energy sector, and the ripple effects are being felt beyond US borders.
Indian solar equipment manufacturers and exporters have not been spared from the fallout. Waaree Energies, one of the largest Indian solar module manufacturers with significant exposure to the US market, saw its shares extend losses by 10%, with current trading levels around ₹27,265. The company had an export-heavy order book worth ₹47,000 crore at the beginning of Q1 FY26, with 57% of this linked to US-based clients. The proposed removal of subsidies and credits is expected to negatively impact utility-scale and residential solar projects in the US, thereby shrinking the demand for imports from firms like Waaree.
Premier Energies, another Indian clean energy company, also saw its shares fall by 4.5%, even though it has negligible export exposure. The broader impact on market sentiment weighed on its stock price as investors grew cautious about the future of solar manufacturing in light of changing US policies. Both Waaree Energies and Premier Energies emerged as the top losers on the Nifty 500 index, reflecting the anxiety in the renewable energy segment.
Brokerage analysts have voiced concerns that the repeal of supportive policies under the Inflation Reduction Act could significantly curtail the growth of clean energy projects in the United States. As per one analysis, nearly 57% of Waaree's export-linked order book now faces uncertainty. The narrowing of the US export opportunity, which many Indian companies had banked on for future expansion, appears to be happening faster than previously anticipated.
This latest development underscores the vulnerability of global clean energy markets to policy shifts in major economies. As countries recalibrate their strategies in the wake of political changes, companies that have built their business models around stable policy support could face heightened risks. The reaction from investors suggests that while renewable energy remains a long-term theme, short-term headwinds driven by political moves cannot be ignored. With the US Senate yet to take a final call on the proposed tax bill, all eyes remain on the unfolding legislative process and its potential to reshape the future of global green energy.
