MW Here's why Enphase and other solar stocks are tanking after Trump's latest move

By Steve Gelsi

Solar-power-components maker's stock draws downgrade and leads the S&P 500's decliners after Trump's executive order enforces a phaseout of tax credits

Enphase Energy Inc.'s stock was dropping in early trading Tuesday, after the maker of solar-power inverters drew an analyst downgrade on the heels of President Donald Trump's move to scrap clean-electricity tax credits faster than expected.

In an executive order late Monday, Trump ordered the ending of clean-electricity tax credits within 45 days after the Big Beautiful Bill goes into effect. It's expected that this will take place before the end of the year.

Enphase Energy's stock (ENPH) dropped 3.4%, making it the leading decliner among the S&P 500 index's SPX components in premarket trading.

Among others in the solar space, First Solar Inc.'s stock (FSLR) dropped 2.5%, Sunrun Inc. shares (RUN) declined by 5.9% and shares of SolarEdge Technologies Inc. (SEDG) slumped 6.5%.

TD Cowen cut its rating on Enphase's stock to hold from buy and slashed its price target on the stock to $45 a share from $58 a share.

"The elimination of [the tax credit] at the end of 2025 will negatively impact U.S. customer-owned resi solar demand, which is currently challenged due to elevated interest rates," TD Cowen analyst Jeff Osborne said in a research note released Tuesday.

Enphase gets about 75% of its revenue from the U.S. market, he said, adding that its solar-power-inverter business has exposure to the customer-owned segment of the market, as opposed to consumers who lease their solar-power gear.

"We see demand for inverters to begin to deteriorate in 4Q25, given distributor inventory and building permit timing, though there may be a pull-forward of demand to lock in the tax credit by the end of 2025," Osborne said.

Another Trump policy - trade tariffs - will also potentially bite into Enphase's profits, since it gets its battery cells from China, he said.

"The company plans to qualify sources outside of China early next year, as tariffs are expected to weigh on margins in the near term," he said.

In his executive order, Trump said he's against subsidizing "expensive and unreliable energy sources" such as solar and wind. Trump's order is aimed at closing any loopholes that would have allowed the use of tax credits in some cases.

"The proliferation of these projects displaces affordable, reliable, dispatchable domestic energy sources, compromises our electric grid, and denigrates the beauty of our Nation's natural landscape," Trump said.

Enphase Energy's stock has fallen 38.2% in 2025 through Monday, First Solar's stock is holding on to a 0.5% gain for the year, Sunrun shares are up 20.1% and SolarEdge's stock has soared 94.3%.

Also read: Solar stocks' losses are nuclear's gain, as Elon Musk takes swipe at budget bill

-Steve Gelsi

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July 08, 2025 07:50 ET (11:50 GMT)

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