Latest news with #Section25D
Time of India
4 days ago
- Business
- Time of India
US residential solar capacity may decline 46% by 2030 due to tax credit repeal: Wood Mackenzie
New Delhi: The recently enacted One Big Beautiful Bill Act (OBBBA), which phases out the Section 25D customer-owned investment tax credit (ITC) for residential solar systems after 2025, could reduce US residential solar capacity by up to 46% through 2030, according to a new report from Wood Mackenzie . The report titled 'Near-term challenges but long-term potential: evaluating the US residential solar addressable market' evaluates the projected impact of OBBBA, noting significant near-term headwinds for the sector. The removal of the residential ITC is expected to make solar systems less affordable for homeowners, causing substantial market disruption. 'Many companies will not be able to stay in business,' said Zoe Gaston , Principal at Wood Mackenzie. 'However, the market will eventually adapt, and the remaining players will diversify and find ways to cut costs. Further, rising retail rates will continue to make the residential solar value proposition more compelling.' Despite the anticipated downturn in the near term, the report highlights strong long-term growth potential. The total addressable market (TAM) for residential solar in the US is expected to reach nearly 1,500 GW by 2050. Using data from the US Census Bureau and internal projections, Wood Mackenzie estimates that approximately 92 million single-family owner-occupied homes will exist by 2050. After excluding unsuitable properties and homes with existing solar systems, more than 70 million homes remain viable for solar installations over the next 25 years. In a conservative 25-year low-case scenario, assuming only 12% TAM penetration, the market would still add 150 GW of new residential solar capacity by 2050. 'However, a lot can change in 25 years, including technological and product advancements, business model evolution, and cost declines that can accelerate residential solar growth,' said Gaston. 'We expect a more positive outcome than our low-case scenario.'
CNBC
20-06-2025
- Business
- CNBC
Rooftop solar stocks face ‘wipe out' but First Solar shares could double, says clean energy investor
The U.S. Senate's latest draft of President Donald Trump's signature tax bill is expected to wreck the rooftop solar industry, while rewarding large-scale renewable energy operators. According to FactSet data, shares of rooftop solar energy firms Sunrun and SolarEdge have declined by 36% and 29% since the release of the Senate's version of the One Big Beautiful Bill earlier this week, which accelerates subsidy cuts to the sector. Supplier to the sector, Enphase Energy , has also plummeted by 20%. The Senate's draft ends clean electricity tax credits for wind and solar in 2028, with a gradual decrease starting in 2026. Earlier versions of the bill prescribed subsidies would be curtailed in 2029 or 3031. Investment banks have also rushed to downgrade residential solar stocks, citing an "ongoing and overwhelming regulatory overhang". KeyBanc Capital Markets slashed its ratings for all three solar stocks to "Underweight," warning that the new bill "may challenge their business models". RBC Capital Markets followed suit, lowering its price target for Sunrun and Enphase by 58% and 44%, respectively. Investors haven't slammed the brakes on all stocks in the solar energy sector, with shares of solar panel makers First Solar and Toyo taking less damage. The rooftop collapse The Senate proposal aims to terminate Section 25D, which has fueled the industry's growth by offering homeowners 30% of the cost of installing solar panels on rooftops through tax credits. "The rooftop solar industry, they are toast," Per Lekander, founder of hedge fund Clean Energy Transition, told CNBC's Squawk Box Wednesday. "I think the whole sector could get wiped out" Wall Street analysts have echoed that bleak assessment. RBC's analysts, led by Christopher Dendrinos, said they were lowering demand and margin assumptions for residential solar names based on the proposed "resi solar lease restrictions and termination of 25D". Janney analysts meanwhile noted the Senate proposal means "residential solar being boxed out of tax credits", creating "more headwinds for domestic residential solar demand". These legislative headwinds come as the sector is already under pressure from higher interest rates, which have made consumer financing more expensive. Lekander pointed to the recent bankruptcy of U.S. energy firm Sunnova as evidence of his assessment. Resilient and insulated While the rooftop sector faces an existential threat, the utility-scale market — which builds large solar farms to power data centers, factories, and entire communities — appears to be somewhat insulated. It is shielded from the impact of subsidy withdrawal largely due to its customer base, its economics, and a sheer lack of viable alternatives. "We believe utility solar will be more resilient," wrote RBC's Dendrinos in a June 18 note to clients, because "these projects are not limited by the leasing restrictions" and the "outlook for growing electricity demand remains strong". The customers for these projects are not individual households but corporations like Meta and Amazon, for whom energy is a relatively small part of a multi-billion-dollar data center budget. "If you [build] a data center, energy power is like 7% of the cost. If 7% of the cost [becomes] 9% of the cost, do you think they will stop this project? I do not think so," Lekander said. In May, Meta Platforms, owner of Facebook, Instagram, and WhatsApp, inked a deal with utility AES Corp to supply 650 megawatts of solar energy in Texas and Kansas. AES, in turn, will purchase solar panels from manufacturers and suppliers to build the solar farms. In June, the utility company also announced the completion of a 500-megawatt solar farm, with 500 megawatts of battery capacity that can last up to four hour, which will supply power to Amazon's data centers. This insensitive demand is also strengthened by the impracticality of alternatives. "If you were to go and try to do a gas turbine, you would probably get it delivered in 2033," Lekander said. "If you want to build a nuclear plant, it's 2040." "A solar plant you can do in one year," the investor added. This reality, analysts suggest, makes utility-scale solar relatively better positioned. RBC's Dendrinos says that "even absent tax credits we believe solar remains highly cost competitive with other fossil fuel generation technologies". However, the Senate bill includes a surprise provision that would repeal the "stacking" of the manufacturing tax credit, and hurt Arizona-based First Solar, America's largest panel manufacturer. The change could prevent the company from claiming credits for each stage of its integrated process—wafer, cell, and module—potentially more than halving its benefit from $0.17 per watt to just $0.07 per watt, according to RBC Capital Markets. But Per Lakander says the sell-off in First Solar is not a crisis but a "great buying opportunity" for long-term shareholders. Asked about the valuation of First Solar's double-digit percent stock plunge, he answered unequivocally: "It is wrongly priced. Okay? It's going to double."
Yahoo
09-06-2025
- Business
- Yahoo
House GOP advances bill including faster phase-out of solar tax credits
Updated May 22 at 4:30 p.m. EST The House passed the GOP's sweeping tax, budget, and immigration bill—which includes a measure to eliminate the 30% residential solar tax credit (Section 25D of the U.S. Tax Code) by the end of this year—early Thursday morning. After initial arguments among key conservative members that the original bill draft didn't do enough to reduce the deficit, the House negotiated changes that significantly impact both residential and commercial solar. Changes to the bill's language were released after 9 p.m. EST on Wednesday. While proposed cuts to Section 25D remain the same, the new bill text includes a provision to prohibit companies from claiming the commercial solar tax credit (Section 48E of the U.S. Tax Code) for third-party-owned systems on residential properties. The provision is potentially retroactive for all of 2025, which means any residential solar systems installed as part of a lease this year would not qualify for the tax credit, though this interpretation is under legal review. Residential systems purchased with cash or a loan and installed in 2025 would still be able to claim the tax credit under 25D. It also includes a faster phase-out of Section 48E. To qualify, construction would need to start within 60 days of the bill's enactment, and systems would need to be placed in service before January 1, 2029—much sooner than the original bill's timeframe, which stipulated a gradual phase-out of the tax credit starting in 2029 and ending in 2032. The new deadlines would be extremely difficult for commercial projects to meet. These changes came after disagreements among House Republicans briefly delayed the original bill's passage to the House floor. The conflict began last Friday during a House Budget Committee meeting, when five Republicans joined Democrats in opposing the bill. Four of them specifically called for deeper cuts to programs like Medicaid and clean energy tax credits. On Sunday, those four Republican holdouts allowed the bill to advance to the House Rules Committee by voting 'present,' claiming that weekend negotiations had resulted in satisfactory changes. The bill still requires approval from the Senate before it goes to Trump's desk for final sign-off—some key GOP senators have previously expressed support for clean energy tax credits, which could make it difficult to pass the bill as is. According to reporting from the New York Times early this morning before the House vote, "Republicans in the Senate have said they want to make major changes to the bill if it passes in the House." The 30% residential solar tax credit is at risk of being cut at the end of 2025. The cut is part of Trump's "Big, Beautiful Bill," a sweeping budget reconciliation bill. The cuts to the tax credit are not definitive: The bill still needs to pass the Senate, and changes will likely be made in the next few months. You can use this form to tell your elected officials to preserve the residential solar tax credit—it takes less than a minute. Stay informed on the latest industry news—delivered to your inbox each month. Sign up for EnergySage's newsletter. As it exists today, the residential solar tax credit, commonly referred to as the Investment Tax Credit (ITC), allows solar owners to claim 30% of installation costs as a credit on federal tax bills through 2032. A gradual phase-down is set to start in 2033, after which the credit would ultimately expire at the end of 2034. If enacted, this abrupt elimination would further disrupt the solar market, an industry already facing economic headwinds thanks to Trump's tariffs and an earlier pause on IRA funds. The new House bill would terminate the residential solar tax credit by December 31, 2025—nearly a decade ahead of schedule and with no phase-down period. The GOP hopes to have it on the President's desk by the Fourth of July. However, bipartisan support for some energy tax credits in the Senate suggests that the current bill text may face opposition. It's unclear whether that support will extend to the residential solar tax credit specifically. But, the ITC has a long bipartisan history. Originally signed into law by President George W. Bush in 2005, it was extended by President Obama in 2008 and again by President Trump in 2020. Most recently, President Biden renewed and expanded the tax credit under the Inflation Reduction Act (IRA) in 2022, alongside other critical clean energy initiatives currently under scrutiny for potential elimination. While the House voted this morning to advance the bill, it still needs to pass the Senate and be signed by the president before it becomes law. The bill has moved to the Senate for further consideration. Senators can now propose changes, vote it down, or pass it in its current form. Last month, four Republican Senators publicly opposed the repeal of energy tax credits, signaling that bipartisan support for solar tax credits could be a potential roadblock to 25D's elimination—making your voice heard is more important now than ever. If both chambers of Congress approve the bill, it'll head to President Trump's desk to be officially signed into law. Although presidents have the power to veto legislation, it's unlikely Trump would reject this particular bill, given its alignment with his party's priorities. The residential solar tax credit has already created thousands of jobs, increased domestic manufacturing, lowered upfront costs, and made energy more affordable for all ratepayers, not just solar adopters. Its termination would jeopardize these jobs and potentially increase electricity costs in the long term. Proponents of this bill are pushing for swift approval. At EnergySage, we encourage you to take action now by contacting your senators to share how eliminating the residential solar tax credit would impact you and your community. Send a note to your elected officials—it takes less than a minute Your story can make a difference. Whether you're a solar owner who has benefited from the ITC or someone who's been considering a solar panel system, letting your senators know why this credit matters for American homeowners and local businesses can help protect the future of solar in the U.S. Especially if you live in one of the key states listed below, consider reaching out directly to the following senators: North CarolinaSenator: Thom TillisContact Page: Number: 919-856-4630 UtahSenator: John CurtisContact Page: Number: 801-524-4380 MaineSenator: Susan CollinsContact Page: Number: 207-622-8414 AlaskaSenator: Lisa MurkowskiContact Page: Number: 907-271-3735 South CarolinaSenator: Lindsey GrahamContact Page: Number: 864-250-1417 Senator: Tim ScottContact Page: Number: 803-771-6112 TexasSenator: John CornynContact Page: Number: 713-572-3337 South DakotaSenator: John ThuneContact Page: Number: 605-225-8823 OklahomaSenator: James LankfordContact Page: Number: 405-231-4941 Louisiana Senator: Bill CassidyContact Page: Number: 318-448-7176 Florida Senator: Ashley MoodyContact Page: Number: 850-433-2603 Senator: Rick ScottContact Page: Number: 850-942-8415 OhioSenator: Bernie MorenoContact Page: Number: 614-469-2083 Senator: Jon HustedContact Page: Number: 567-304-3777 KansasSenator: Jerry MoranContact Page: Number: 785-628-6401 PennsylvaniaSenator: Dave McCormickContact Page: Number: 717-231-7540
Engadget
20-05-2025
- Business
- Engadget
Solar trade association warns of 'devastating energy shortages' if incentives are cut
The Solar Energy Industries Association released an assessment of how the budget reconciliation bill currently under review in Congress would have a negative impact on the economy. The legislation cuts incentives around solar power investment and adoption, such as the Section 25D residential tax credit. The group's analysis found that the bill, as it stands, would lead to the loss of nearly 300,000 current and future jobs in the US. It also said removal of incentives could mean a loss of $220 billion in investment in the sector by 2030. It also pointed to a future energy shortage, claiming that solar was on course to be responsible for about 73 percent of the 206.5 GW of new energy capacity needed in the country by 2030. 'Passing this bill would create a catastrophic energy shortfall, cede AI and tech leadership to China, and damage some of the most vital sectors of the U.S. economy,' SEIA President and CEO Abigail Ross Hopper said. It's the type of reaction we expect to see when an industry is under threat from federal action. It's also the type of researched data that doesn't seem to have much influence on the current administration, particularly when it comes to the environment and sustainability.
Yahoo
13-05-2025
- Business
- Yahoo
Coinbase, Caterpillar upgraded: Wall Street's top analyst calls
The most talked about and market moving research calls around Wall Street are now in one place. Here are today's research calls that investors need to know, as compiled by The 5 Upgrades: Monness Crespi upgraded Coinbase (COIN) to Buy from Neutral with a $300 price target, telling investors that the company's Q2 guidance for $600M-$680M in subscription and services revenue now looks "increasingly conservative" considering the strength in underlying assets, especially Ethereum and Solana, during and following the fiscal Q2 period, which should boost blockchain rewards and custody line items. Baird upgraded Caterpillar (CAT) to Outperform from Neutral with a price target of $395, up from $309. Exiting Q1, a combination of lower-than-normal seasonal dealer inventory build, a much better than expected backlog, and stabilization in dealer retail sales all pointed to potential fundamental improvement into 2026 for Caterpillar, the firm tells investors in a research note. Wolfe Research upgraded First Solar (FSLR) to Outperform from Peer Perform with a $221 price target. The firm cites better clarity on 45X credits for the first time since election year politics started in early 2024 for the upgrade. Wolfe Research upgraded Insulet (PODD) to Outperform from Peer Perform with a $350 price target. Insulet is the "share-taking asset" in the pump space and still has "tons" of revenue and margin opportunity ahead, including a potential inflection from type 2 diabetes, the firm tells investors in a research note. Macquarie upgraded Peloton (PTON) to Outperform from Neutral with a price target of $10 following a transfer of coverage. The company reported another quarter ahead of guidance and expectations on sustained margin focus and better user numbers, the firm tells investors in a research note. Top 5 Downgrades: Leerink downgraded Johnson & Johnson (JNJ) to Market Perform from Outperform with a price target of $153, down from $169, after CMS issued draft guidance for 2028 IRA drug price controls that creates risk that hyaluronidase combination products may not be protected from IRA price negotiations for 13 years after combo approval. Leerink also downgraded Halozyme (HALO) to Underperform from Market Perform with a price target of $47, down from $63. Barclays double downgraded Enphase Energy (ENPH) to Underweight from Overweight with a price target of $40, down from $51. The firm says the possible repeal of Section 25D "has flown under the radar and is now taking a bite out of ENPH." BMO Capital also downgraded Enphase Energy to Underperform from Market Perform with a price target of $39, down from $46, following the release of the House Ways and Means Committee tax plan. HSBC downgraded Chevron (CVX) to Hold from Buy with a price target of $158, down from $176. The sharp fall in oil prices since early April has raised pressure on oil majors' financial frameworks, which were designed to work at $70 per barrel oil, the firm tells investors in a research note. Mizuho downgraded Murphy Oil (MUR) to Neutral from Outperform with a price target of $31, down from $32. Mizuho sees potential weakness for global oil prices but expects gas and refining fundamentals to improve over the next 12 months. Goldman Sachs downgraded Brown & Brown (BRO) to Neutral from Buy with a price target of $119, down from $126. The firm expects the company's organic growth to revert towards peer levels, which it believes could place some pressure on the stock's premium valuation multiple. Top 5 Initiations: Deutsche Bank initiated coverage of NetEase (NTES) with a Buy rating and $130 price target. The firm sees "substantial opportunities" for the online gaming sector via delivering a superior gaming experience and attracting higher spending among gamers. Raymond James initiated coverage of Super Micro (SMCI) with an Outperform rating and $41 price target. The company has emerged as a "market leader" in artificial intelligence-optimized infrastructure. Jefferies initiated coverage of Insmed (INSM) with a Buy rating and $105 price target. The company's "first-in-disease status," strong clinical profile, and enthusiasm among key opinion leaders should assure a rapid launch for its brensocatib drug, which is a "potential megablockbuster" bronchiectasis treatment, the firm tells investors in a research note. TD Cowen initiated coverage of Bright Minds (DRUG) with a Buy rating and no price target. The company's lead asset BMB-101 is a biased 5-HT2C agonist that has the potential to be best in class for the treatment of certain refractory seizure disorders, the firm tells investors in a research note. BofA initiated coverage of Calumet (CLMT) with a Buy rating and $15 price target. The company is progressing its biofuel business Montana Renewables' MaxSAF project to expand renewable jet fuel capacity, notes the firm, which expects MaxSAF to roughly double EBITDA between 2025 and 2027.
