The US House of Representatives passed President Trump’s “One Big Beautiful Bill” on May 22, 2025. The bill is now being debated in the Senate, where changes are likely to be proposed. The bill is largely seen as a blueprint for Donald Trump’s tax agenda, signalling a dramatic shift away from supporting renewable energy and sustainable initiatives.
Trump’s proposed bill aims to largely dismantle clean energy incentives. This reversal could significantly slow the pace of the energy transition in the US with ripple effects across the global markets. It will hurt companies that invested in renewable energy, electric vehicles, and clean manufacturing due to the tax credits offered by the Inflation Reduction Act (IRA) passed by the Biden administration.
Incentives for solar and wind projects could be phased out as early as 2028 or earlier for new construction. Meanwhile, the withdrawal of incentives for cleaner cars could dampen consumer demand for EVs.
A sudden withdrawal of policy support could:
The proposed tax bill, if enacted in its current form, presents a significant headwind for green investing. Therefore, renewable energy traders should brace for continued volatility. Plus, rising energy bills for American households and the adverse impact of fossil fuels on the climate could dampen market sentiment, hurting clean energy stocks.
Renewable energy, EV and energy storage stocks are the worst hit.
Steep declines in clean energy stocks could present opportunities for green traders to buy the dip. However, at such times, it is important to carefully assess the long-term viability of companies based on their diversified revenue streams, technological advantages and adaptability to a less supportive policy environment.