Sunrun Stock Plummets Following Tax Credit Removal

WASHINGTON, D.C. — Sunrun‘s stock suffered a significant decline Tuesday as Republicans in the Senate confirmed plans to cut solar tax credits from the budget bill. This decision marks a shift away from supporting green energy initiatives under the current administration.

Sunrun’s stock, known by its ticker RUN, saw a notable 35% drop in premarket trading, while other solar companies including Enphase Energy and SolarEdge Technologies faced similar losses of 18% and 30%, respectively. The overall trend suggests a potential downturn for the solar sector as the current political climate begins to affect investments in renewable energy.

According to Citi analysts, the Senate’s actions represent a departure from a previously established timeline. They noted that while the new bill offers a “slight improvement,” it still imposes stricter regulations compared to earlier proposals. The revised budget plan demands the complete phase-out of tax credits for clean energy projects by 2028, while tax incentives for traditional energy sources, such as nuclear and hydropower, will remain until 2036.

KeyBanc‘s analyst Sophie Karp downgraded Sunrun, Enphase, and SolarEdge to Underweight due to what she described as an “overwhelming regulatory overhang” affecting the solar sector. Karp indicated that the Senate bill fails to instill optimism and could pose serious challenges for these companies moving forward.

Despite the bleak outlook, Sunrun and other solar firms have received moderate buy ratings from Wall Street analysts, who suggest potential price recoveries in the future. Sunrun’s shares hold a consensus rating of Moderate Buy, derived from eight Buy, eight Hold, and two Sell ratings.