Trump's tax rules benefit clean energy investors

The shares of U.S. companies that produce solar energy rose Monday, after the Trump Administration released new rules on clean energy subsidies. These were less strict than many investors had expected.

The Treasury Department narrowed its definition of what constitutes a solar or a wind project as being under construction. This is a requirement for qualifying for federal tax credits that are worth 30% of the project's costs.

Changes include requiring that developers of large solar arrays or wind farms complete actual work, rather than just proving they've invested capital. The move was criticized by solar companies on Friday. However, analysts, investors, and others praised the guidelines as better than expected.

The MAC Global Solar Energy Index was up 4% at midday, with the top gainers being residential solar company Sunrun up 9% and panel manufacturer First Solar up 8.6%.

In an email, Raymond James analyst Pavel Molchanov stated that "despite some complications it is manageable."

Some industry professionals feared they would be required to pay a high percentage of the project costs to qualify for credits or that the deadline to claim subsidies would be shorter once construction began. Treasury Department has left the four-year window for projects that begin construction before credits expire unchanged.

According to the One Big Beautiful Bill Act, projects must begin construction or enter service before July 2020. Bonuses can be added to the 30% tax credit to increase the subsidy. The credits were previously available until 2032. (Reporting Nichola Groom).

(source: Reuters)