Enphase Energy delivered the first earnings report among big U.S. solar players late Tuesday and left investors with mounting concerns about the sector's future profitability.

Shares of the maker of solar energy technology and batteries were down 12% to $37.15 in morning trading. Solar stocks broadly declined. SolarEdge down 5%; Daqo New down 4%.

Coming into Wednesday trading, the stock was down 38% so far this year amid the Trump administration's efforts to slash tax credits for renewable energy projects.

Enphase's guidance deepened the gloom. It forecast revenue of between $330 million and $370 million in the current quarter, while expectations were for $369 million, according to FactSet.

Tariffs are playing a part, too. Enphase expects a hit of between 3% and 5% to its gross margin as a result of levies, CEO Badri Kothandaraman said in a call with investors late Tuesday.

TD Cowen analyst Jeff Osborne sees minimal factors that can help the stock in the second half of the year due to soft U.S. demand and a lack of clarity around safe-harbor activities, which allow renewable energy companies to lock in eligibility for tax credits by beginning project construction.

Osborne lowered his price target on shares to $40 from $45, maintaining a Hold rating.

Enphase's second-quarter adjusted earnings came in at 69 cents a share on revenue of $363 million, above analysts expectations of 62 cents from revenue of $359 million, according to FactSet.

"Looking at the bigger picture for solar, we favor utility-scale over residential while acknowledging that results may be lumpy and utility-scale is not immune to fears regarding the tax credit changes," Baird analyst Ben Kallo wrote in a research note following Enphase's report.