By Adam Whittaker

Shares in European renewable companies rose in opening trade after the Trump administration on Friday published better-than-expected guidelines on which projects will qualify for wind and solar tax credits.

In early morning European trade, Vestas Wind Systems shares jumped 13%, EDP Renovaveis rose 5.5%, Nordex was up 3.6% and Orsted ticked up 2.5%.

After the European markets closed on Friday, the U.S. Treasury issued guidance that said projects must begin "physical work of a significant nature" by July 5, 2026, in order to qualify for the tax credits. In doing so, it removed a previous 5% capital expenditure requirement for the project to qualify.

Under the new guidelines, projects must also demonstrate a "continuous program of construction" with work taking no more than four calendar years. However, the rules do allow for delays to permitting, grid interconnection or weather related issues.

The tax credits were part of former President Joe Biden's Inflation Reduction Act, and their sunset was one part of President Trump's "one big beautiful bill," which was signed July 4.

The new guidelines are materially positive for renewable energy companies and component manufacturers as they should provide visibility on the subsidies for projects coming online through 2030, J.P.Morgan analysts wrote in a note to clients.

There had been fears that the U.S. government could increase the 5% capital expenditure threshold or reduce the required construction period to less than four years, the analysts add.

An underappreciated part of the new rules is the addition of interconnection and permitting challenges as reasons to break the four-year continuity requirements, Jefferies analysts said.

The fact that projects starting in 2026 will be able to claim credit through to 2030 supports comments made by Vestas Wind Systems chief executive Henrik Andersen about the U.S. market retaining momentum until the end of the decade, the analysts added.

Write to Adam Whittaker at adam.whittaker@wsj.com

(END) Dow Jones Newswires

August 18, 2025 04:12 ET (08:12 GMT)

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