Daqo New (DQ) stock plummeted 5.69% in pre-market trading on Tuesday, as investors reacted to news of potential changes in U.S. energy policy that could significantly impact the solar industry. The sharp decline comes amid a broader sell-off in solar energy stocks, with some companies experiencing even steeper drops.

The plunge is attributed to an announcement from Republicans controlling the U.S. Senate Finance Committee, who unveiled modifications to President Donald Trump's tax-cut and spending bill. The proposed changes include phasing out tax credits for solar and wind energy by 2028, a move that could severely impact the profitability and growth prospects of companies in the renewable energy sector.

This potential policy shift comes at a challenging time for the U.S. solar industry, which is already grappling with weak residential demand due to high interest rates and recent metering reforms in California, a key market. The proposed legislation, part of the "One Big Beautiful Bill Act," is set to be debated by Senate Republicans as they push for passage before the July 4 holiday. While the bill also extends tax credits for hydro, nuclear, and geothermal power to 2036, the solar industry appears to be facing a significant headwind that could reshape its economic landscape in the coming years.