If you’ve been holding solar stocks over the past few months, you’ve probably been feeling the pain.
Some of the biggest names—like Enphase, SolarEdge, and Sunrun—have crashed 50–70% from their highs.
Now, part of this selloff is due to is the usual suspects: higher interest rates and a slowdown in residential demand. When it costs 7–8% to finance a $30,000 rooftop solar system, a lot of homeowners hit pause. That’s understandable.
But there’s another piece of this story: President Trump’s “big, beautiful bill.”
In this article, we’ll explain how the Trump Administration’s sweeping proposal is impacting the solar sector… and whether it’s time to cut and run.
What the ‘big, beautiful bill’ says about solar power
Trump’s “big, beautiful bill” is a broad tax overhaul that includes reshaping tax credits across the board. One item on the chopping block: clean energy incentives. The bill proposes pulling back support for renewables while pushing more toward traditional energy sources.
The bill cleared the House by a narrow vote on May 22 and is now being considered by the Senate.
While there’s a good deal of Republican infighting over specific line items (particularly cuts to social programs like Medicaid), both the House and Senate versions of this bill are going after clean energy subsidies hard.
In particular, they’re planning to either kill or phase out the federal tax credit that gives homeowners 30% off the cost of a solar system. That’s been a major driver of demand for over a decade.
The House version would end this credit completely in 2026. The Senate version gives a little more runway—dropping it to 18% in 2026, 6% in 2027, and zero in 2028. Either way, the writing’s on the wall.
When those subsidies go away, the economics of installing solar at home get a lot worse. The monthly payments go up, the payback period stretches out, and it becomes a much tougher sell for installers.
That’s why residential solar names are falling off a cliff.
The entire solar model is getting upended
A lot of these companies—especially Sunrun and Sunnova—have built their whole model around aggressive growth fueled by cheap financing and generous incentives. If you take away the incentives and layer on higher interest rates, that model breaks down fast.
SolarEdge and Enphase are a little different—they make the components, like inverters and batteries. But they still rely heavily on residential demand, especially in the U.S. So when installers stop buying, their revenue dries up, too.
And if that weren’t enough, the legislation also takes aim at utility-scale solar projects down the road. Commercial credits stay intact for now, but they begin shrinking after 2028. It’s a slow bleed, but it’s still a bleed.
What this means for solar investors
First, don’t panic sell. There’s a difference between a bad stock and a good stock in a bad market. Some of these names are going to be just fine on the other side of this. But you’ve got to be selective.
Start by asking yourself:
- Is the company profitable, or at least close to it?
- Are they diversified outside the U.S.?
- Are they moving into utility-scale projects or battery storage? That’s where the future is heading—and that’s where the remaining subsidies are likely to stick.
Also, don’t forget that markets tend to overreact. We’ve seen this before. When incentives shift, solar stocks tank… then they bounce back once investors figure out who the survivors are. That’s your opportunity—if you’re paying attention.
Watch the legislation. The Senate version is more measured than the House version, and it hasn’t been finalized yet. If that 30% credit sticks around longer, we could see a snapback rally in some of these names.
But longer term, this bill is a wake-up call. If you’re going to invest in solar, you can’t just buy the hype. You’ve got to know the business, the revenue mix, the balance sheet, and most importantly, how exposed it is to changes in policy.
Because like it or not, solar is a political football. And the market’s learning that lesson the hard way right now.
Bottom line
Trump’s “big beautiful bill” is rocking the solar sector, and for good reason. When you yank away subsidies in an industry built on them, there’s going to be pain. But that doesn’t mean solar is dead—it just means investors need to be smarter.
Some names will survive and thrive. Others are going to disappear.
You’ve got time to figure out who’s who—but you’ve got to know which questions to ask.
For Frank and Daniel’s in-depth discussion on how to manage the solar crash, tune into the latest Wall Street Unplugged Premium episode.
