Freedom Broker names clean energy winners and losers from proposed U.S. tax changes

Freedom Broker recommends selling residential solar panel stocks, which could be hit hard by potential tax changes forthcoming in the U.S. The «Big Beautiful Bill» entails scrapping a 30% tax credit for households that install solar panels within six months of the bill's passage, as well as power production and investment credits for wind and solar companies six years earlier than the program was supposed to end. 

Businesses that manufacture and install rooftop solar panels will be hit hardest by the tax changes proposed by the Senate Finance Committee on June 16, according to Freedom Broker. Its analysts recommended investors sell shares of residential solar panel companies, according to a breakdown seen by Oninvest.

Currently, there is a 30% tax credit for residential rooftop solar panels in effect until 2034. The Senate Finance Committee proposes ending it within six months. Freedom Broker fingers small-cap retail-heavy solar players like Sunrun ($1.42 billion market capitalization) and Enphase Energy ($4.70 billion) as potential big losers from the bill, with demand for their products falling as early as this year.

Meanwhile, Freedom Broker says First Solar ($15.55 billion market capitalization), a leading U.S. solar panel manufacturer, could be a beneficiary, as it focuses on utility-scale solar projects. It also has a large contracted backlog, which could soften the blow, the Freedom Broker breakdown stated. 

Another change proposed by the Senate Finance Committee is to accelerate the termination of the 100% production and investment tax credits for wind and solar projects that companies receive under the Inflation Reduction Act. They are set to last through 2032, but lawmakers want to phase them out from 2026 through 2028. 

If this becomes law, the internal rate of return for projects that start after 2025 will suffer, Freedom Broker writes. Against this backdrop, it advises investors to look at SolarBank (market capitalization of $63.66 million), a small-cap renewable and clean energy project developer and owner focusing on solar, which may complete several large solar projects in the second half of 2025. SolarBank is Freedom Broker's pick. 

The outlook for utilities stocks depends on the timing of commissioning of companies' current projects and whether they can prove they have started new ones this year, Freedom Broker explains. It mentioned NextEra Energy ($147.25 billion market capitalization) and AES ($7.41 billion). Overall, Freedom Broker analysts recommend holding utilities stocks until the legislative outlook becomes clearer: «The Senate proposal represents a significant negative catalyst for solar-focused equities, but only moderate pressure on the earnings of diversified, regulated utilities.»

Three companies involved in hydro and nuclear power generation – Dominion Energy ($46.21 billion market capitalization), PG&E ($30.48 billion), and Public Service Enterprise Group ($40.97 billion) – are unlikely to be adversely affected by the proposed tax changes, Freedom Broker argues. In fact, the Senate Finance Committee wants to retain the tax credits for these segments. 

The situation in the clean energy industry had already worsened after the U.S. had imposed anti-dumping and countervailing duties on solar panel (and cell) imports from Southeast Asian countries, which took effect last Monday, June 16. Among those most dependent on such imports Freedom Broker names Enphase Energy and Sunrun.

In contrast, First Solar has production based in the U.S. Earlier in June, the stock was upgraded by Jefferies as the «only game in town» given the import restrictions. 

The AI translation of this story was reviewed by a human editor.