The stocks of leading Indian renewable energy companies like Waaree Energies and Premier Energies are down by 10 percent and 5 percent respectively, after Trump announced the suspension of a previous bill approved by the Biden- administration. The US’s largest energy stock, like Sunrun and NextEra, also saw their stock plunge by 37 percent and 7 percent respectively on Friday’s trading session.
Why did the stocks plunge?
The stocks of companies like Premier and Waaree Energies, which heavily rely on exports, took a hit after the US House of Representatives passed a new tax bill by a thin margin of 215-214, as proposed by President Donald Trump.
This bill aims to cut out crucial funding provisions from the Biden Administration’s Inflation Reduction Act, including grants designed to tackle air pollution, reduce greenhouse gas emissions, and support the purchase of electric heavy-duty vehicles. Additionally, it suggests eliminating the 30 percent federal tax credit for taxpayers who install rooftop solar systems.
Although the bill still needs to clear the Senate, it has already sparked a wave of negative sentiment among investors in the clean energy sector focused on exports to the US.
Waaree derives 57 percent of its orders from the US region, which makes it extremely vulnerable to the policy shifts. However, Premier Energies derives only 3 percent of its revenue through exports, but plans to commission a new 1.2 GW solar cell manufacturing facility in the US, which is in turn at risk with policy uncertainity.
What does the company have to say?
However, the spokesperson of Waaree Energies says that India is not on the list of Entities of concern, instead, they see the new US tax bill as an opportunity for India. And a similar statement is expected from Premier Energies soon. However, we have to wait a bit more to gain a much better clarity in this development story.
Written by Satyajeet Mukherjee
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