JinkoSolar (JKS) saw its stock price plummet by 5.28% in pre-market trading on Tuesday, as the solar industry faced a significant setback. The sharp decline comes in response to a U.S. Senate panel's proposal to fully phase out solar and wind energy tax credits by 2028, potentially dealing a blow to the renewable energy sector.

The draft bill, circulated by a U.S. Senate committee, suggests substantial changes to President Donald Trump's "One Big, Beautiful Bill Act." The proposed legislation envisions phasing out subsidies established by the Biden-era 2022 Inflation Reduction Act for solar and wind energy. The plan would reduce the incentive to 60% of its value in 2026 and completely eliminate it by 2028, a significant acceleration from the current law which wouldn't begin phasing out the tax credits until 2032.

JinkoSolar's decline is part of a broader trend affecting the entire solar industry. Other major players in the sector, including Sunrun, SolarEdge, Enphase Energy, and First Solar, also experienced substantial pre-market losses ranging from 9% to 27%. The proposed changes could potentially hamper growth in the solar energy sector, which is already grappling with challenges such as weak U.S. residential demand, high interest rates, and recent metering reforms in California.