Solar stocks could see brighter days ahead.
All after Senate Majority Leader Chuck Schumer, D-N.Y., and Sen. Joe Manchin, D-W.V., said they reached a deal on climate spending. In fact, the “Inflation Reduction Act of 2022” now includes $369 billion for clean energy provisions.
According to CNBC, “The bill, which the full Senate will consider next week, includes a 10-year extension of clean energy tax incentives. The Investment Tax Credit, which has been key to the industry’s growth and has typically garnered bipartisan support, was last extended in 2020. It was set to decrease at the end of this year.”
If passed into law, the bill, according to CNBC, would include funding for:
- Manufacturing clean energy products, including a $10 billion investment tax credit to manufacturing facilities for things like electric vehicles, wind turbines, and solar panels, and $30 billion for additional production tax credits to accelerate domestic manufacturing of solar panels, wind turbines, batteries and critical minerals processing.
- Cutting emissions, including $20 billion for the agriculture sector and $3 billion to reduce air pollution at ports.
- Research and development, including a $27 billion clean energy technology accelerator to support deployment of technologies that curb emissions and $2 billion for breakthrough energy research in government labs.
- Preserving and supporting natural resources, including $5 billion in grants to support healthy forests, forest conservation, and urban tree planting, and $2.6 billion in grants to conserve and restore coastal habitats.
- Support for states, including about $30 billion in grant and loan programs for states and electric utilities to advance the clean energy transition.
- Environmental justice initiatives, amounting to more than $60 billion to address the unequal effects of pollution on low-income communities and communities of color.
- For individuals, a $7,500 tax credit to buy new electric vehicles and a $4,000 credit for buying a new one for the lower and middle class.
It’s why you may want to keep an eye on solar stocks, like Sunrun (RUN), SunPower (SPWR), and Canadian Solar (CSIQ), for example.
Or, take a look at Enphase Energy. Over the last few weeks, the ENPH stock soared from a low of about $180 to $254. Even solar ETFs have been on fire. The Invesco Solar ETF (TAN), for example, jumped from about $66 to $77 in recent weeks.