Solar stocks rise as congressmen propose suspension of 45X manufacturing tax credit

Enphase Energy (NASDAQ:ENPH) finished +8.4% in Monday’s trading, leading broad gains in most solar stocks, after two members of the U.S. House submitted a resolution to suspend the 45X advanced manufacturing production tax credit, and rewrite the legislation to prevent Chinese companies from receiving tax credits.

Among other strong gainers in the group: Solaredge Technologies (SEDG) +15.9%, Canadian Solar (CSIQ) +9.7%, Sunrun (RUN) +9.6%, Sunnova Energy (NOVA) +9%, Array Technologies (ARRY) +5.8%, Shoals Technologies (SHLS) +4.9%, JinkoSolar (JKS) +4%, First Solar (FSLR) +3.4%, Fluence Energy (FLNC) +2.1%.

While legislation implemented under the Inflation Reduction Act, including the 45X tax credits, has contributed to a significant expansion of the U.S. renewable energy manufacturing sector, Michigan’s John Moolenaar and Maine’s Jared Golden said the tax credits currently allow for foreign companies, especially in China, to benefit from the tax breaks provided they build facilities on U.S. soil.

During a weekend webinar in which the Clean Energy Associates discussed the potential impacts of the election on the U.S. clean energy manufacturing sector, senior policy analyst Christian Roselund suggested that foreign companies would be able to benefit from the IRA tax incentives under the legislation in its current form, but that a crackdown could be coming, according to PV Tech.