By Avi Salzman

Several solar and wind stocks extended gains Tuesday, after the early drafts of a Republican tax and spending bill weren't as bad for renewables as feared.

But the bill certainly isn't great for renewables: It guts many portions of the Inflation Reduction Act that offered cheap loans and grants to clean energy projects and carbon-free power sources like hydrogen. But instead of a full repeal of tax credits that were worth at least 30% of the projects, the House Ways and Means committee is looking to sunset them starting in 2029.

"It isn't nearly as draconian as was feared," wrote Shawn Kravetz, president and chief investment officer of Esplanade Capital, which invests in renewable energy.

That's boosting the stocks of solar installers like SunRun, which was up 15% on Tuesday and has risen 80% in the past week. Vestas Wind Systems, which makes wind turbines, was up 10%.

There are other provisions that could benefit domestic manufacturers.

Shares of First Solar, the largest American solar manufacturer, jumped 18% on Tuesday. The company should benefit from rules in the bill that, if approved, place more limits on imports from so-called Foreign Entity of Concern, which would likely apply to Chinese goods. First Solar competes heavily with Chinese-supported companies.

Write to Avi Salzman at avi.salzman@barrons.com

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May 13, 2025 10:27 ET (14:27 GMT)

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