Shares of utility and renewables power developer NextEra Energy (NEE 5.34%) rallied today, up 5.3% in Tuesday's trading session.

NextEra had fallen hard yesterday, after a surprise tax was added to the Senate's version of the "Big, Beautiful Bill" going to a vote this week. However, it appears that in the final version, that tax was stripped out.

The "Big, Beautiful Bill" heads to the finish line

One of the biggest provisions of the bill, which narrowly passed the Senate today in a 50-50 vote, in terms of the stock market impact at least, is its treatment of renewable energy tax credits.

Those credits were abruptly phased out in the House version of the bill passed in May -- so much so that it crashed virtually all solar and wind energy companies. Yet in the Senate version, it appears lobbying by solar and other business groups succeeded in relaxing some of the phaseouts.

While the Senate version gives the renewables industry more time to start large-scale projects, a surprise provision popped up over the weekend, which led to NextEra and other solar and wind developers falling hard yesterday. The tax would have been added to projects that used a certain amount of foreign components -- many of which are made in China. Since American-made parts for certain projects are either expensive or nonexistent, that had the prospect of putting huge burdens on developers.

But today, it appears the controversial provision has been stripped out of the final bill, prompting today's rally. In addition, while the original Friday version of the bill said solar projects must be placed into service by the end of 2027 to qualify for the tax credits, an exemption was carved out for projects that started construction one year prior to that, by the end of 2026.

The "Big, Beautiful Bill" is now headed back to the House of Representatives. 

Image source: Getty Images.

Solar still faces a tougher path

While the relaxations were definitely welcome news for solar and wind developers today, these companies will still have to navigate how to grow without these tax subsidies starting in 2028. While it may be harder to grow beyond that date, current projects in the works still seem set to go ahead, and of course, there's another election in 2028 as well.