The shares of Waaree Energies fell over 2 percent on June 18, extending losses for a second day after a US Senate panel proposed to completely phase out solar and wind energy tax credits by 2028.
Waaree Energies shares tracked its Wall Street peers that fell on the proposal, with First Solar shares down nearly 18 percent, while Solaredge Technologies fell as much as 33 percent. Shares of Sunrun- biggest US rooftop solar company - crashed 40 percent in a single session.
The Senate panel's draft bill proposed to fully phase out the subsidies that were earlier given under the Biden administration following the 2022 Inflation Reduction Act. The draft bill planned to reduce the incentives for solar and wind energy projects to 60 percent of its value by 2026, and then completely ending them by 2028. Under the current law, the process of phasing out the tax credits is not supposed to begin before 2032.
This comes after US President Donald Trump earlier proposed a tax bill, aiming to eliminate the funding these companies received under the Biden administration. The Republican Senate's proposal however added one change to Trump's bill – it proposed to grant 100 percent of the credit to hydropower, nuclear and geothermal facilities until 2033, then phase it out to zero by 2036.
While the Senate's proposal led to the significant crash in the stocks, it is worthy to be noted that it is slightly more lenient than Trump's version, which had proposed to cut all tax credits at one go if a project doesn't start construction within 60 days of the bill's enactment and be placed in service by the end of 2028.
Waaree Energies has notable amount of operations in US, hence the phasing out of tax credits may have an impact on its margins. Earlier this year, the company had announced that it has started commercial production of solar modules at its manufacturing facility in US, becoming the first Indian renewable energy company to build a PV module manufacturing facility in Brookshire, Texas.
Also Read: Our LIVE blog on stock market updates
Waaree Energies shares have plunged over 5.5 percent in the past five days, and nearly 8 percent in the past one month. However, the stock gained 16 percent in the past one year. It is currently over 27 percent lower than its 52-week high of Rs 3,743 per share, but is nearly 46 percent higher than its 52-week low of Rs 1,863 apiece. Over 7.5 lakh shares have been involved in active trade within the first hour of trading, according to data on the NSE.
(With inputs from agencies)
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
