Obvious Losers, Unexpected Winners As Tax Bill Passes Senate
NextEra Energy (NYSE:NEE) slipped another 1.2% on Wednesday, compounding earlier losses, while AES Corp. (NYSE:AES) closed flat after a two-day decline of more than 6%. Shoals Technologies (NASDAQ:SHLS), already down over 14% on Monday, dropped another 3.6% Wednesday. Nextracker (NASDAQ:NXT) slid 2.4%, and Enphase Energy (NASDAQ:ENPH) shed another 4.2%, extending its weekly decline past 15%.
Array Technologies (NASDAQ:ARRY) was down 1.8% Wednesday, failing to recover from Monday's -10.1% plunge, as investors reassessed the near-term pipeline risk from the new operational deadline for tax credit eligibility.
But There Are Winners, Too …
Sunrun (NASDAQ:RUN) added 2.7% Wednesday, bringing its weekly gain to nearly 17% as markets priced in a more favorable outlook for distributed solar. First Solar (NASDAQ:FSLR) advanced another 1.5% on the day following two strong sessions. Analysts at Jefferies upgraded the stock, calling it a key winner from U.S. content incentives and tariffs on Chinese materials.
Fluence Energy (NASDAQ:FLNC) and Eos Energy Enterprises (NASDAQ:EOSE), both operating battery storage projects in the U.S., gained 3.1% and 2.5% respectively. As noted here, traders continue rotating into companies best positioned to meet the new sourcing and operations deadlines.
And Hydrogen is getting a boost, as well.
Hydrogen stocks surged for a third straight session after the Senate unexpectedly extended the 45V clean hydrogen production tax credit to 2027. Plug Power (NASDAQ:PLUG) soared another 8.2% Wednesday, bringing its three-day gain to more than 40%. Bloom Energy (NYSE:BE) added 3.4%, and Ballard Power Systems (NASDAQ:BLDP) rose 2.2%, supported by increasing optimism that delayed U.S. hydrogen projects will now move forward under more favorable terms.
Coal, nuclear, and legacy energy stocks have also caught the tailwinds.
Steelmaking coal producers continued to gain on Wednesday after the bill granted critical minerals tax credit eligibility to metallurgical coal. Alpha Metallurgical Resources (NYSE:AMR) rose 1.9%, Warrior Met Coal (NYSE:HCC) added 2.4%, and Peabody Energy (NYSE:BTU) was up 1.5%.
Meanwhile, uranium and nuclear-linked equities also saw light buying as the bill preserved tax credits for non-carbon baseload power including nuclear, hydro, and geothermal. Cameco (NYSE:CCJ) and Constellation Energy (NASDAQ:CEG) rose modestly, up 0.7% and 1.1% respectively.
Policy In the Volatility Driver's Seat
The Senate bill tightens tax credit qualification rules by requiring renewable projects to be operational by 2027, rather than just under construction. It also levies new taxes on projects that use Chinese-sourced materials and allows some carveouts for clean hydrogen and domestic manufacturers.
According to Rhodium Group estimates, the combination of tax loss and China-linked penalties could raise project costs by up to 20%, with developers likely to pass that through in electricity prices. The American Clean Power Association warned of an 8–10% rise in consumer electricity bills if the proposal is enacted.
With the bill headed back to the House for reconciliation, market participants are bracing for additional volatility. Fiscal conservatives are expected to contest the Senate version's deficit impact—estimated to add roughly $1 trillion more than the House-passed bill from May. For now, traders are positioning around likely winners with U.S.-centric supply chains, while pricing in risk for utility-scale developers with international exposure.
By Alex Kimani for Oilprice.com
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