(Reuters) -Shares of U.S. solar energy companies rose on Monday after the Trump administration released new subsidy rules for clean energy projects that were not as stringent as many investors had feared.
Late on Friday, the Treasury Department narrowed the definition for what it means for a solar or wind project to be considered under construction, a requirement to qualify for federal tax credits worth 30% of a project’s cost.
The changes include requiring developers of big solar arrays and wind farms to complete physical work rather than simply show that they have invested capital. Solar companies criticized the move on Friday, but analysts, investors and others said the guidelines were better than many expected.
The MAC Global Solar Energy index was up 4% in mid-day trade, with top gainers, including residential solar company Sunrun, up 9%, and panel manufacturer First Solar, up 8.6%.
“Although it creates some complications, it is manageable,” Raymond James analyst Pavel Molchanov said in an email.
Some in the industry had feared that project developers would have to incur a large percentage of project costs in order to be eligible for the credits, or that they would have a narrower timeline to claim the subsidies after starting construction. The Treasury Department left the 4-year window unchanged for projects that start construction before the credits expire.
The One Big Beautiful Bill Act requires projects to begin construction by July of next year or enter service by the end of 2027 to qualify for a 30% tax credit and bonuses that can push the subsidy even higher. Under previous law, the credits were available through 2032.
(Reporting by Nichola Groom)
Comments