Enphase and Other Solar Stocks Tumble as Manchin Won’t Support Climate Spending

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US Sen. Joe Manchin

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Kevin Dietsch/Getty Images

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Solar energy stocks were tumbling Friday, following reports that Sen. Joe Manchin wouldn’t be supporting an economic package that increased funding for climate change provisions.

Democrats are pushing to pass the economic package before Congress recesses in August. On Friday, the Democratic senator from West Virginia said he wouldn’t agree to move forward with the vote before the recess.

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“I said Chuck, can we just wait until the inflation figures come out in July,” Manchin said, speaking on broadcast talk show “Talkline with Hoppy Kercheval.” Manchin was referring to Senate Majority Leader Chuck Schumer.

Given widespread Republican opposition to the economic package, Manchin’s vote is a crucial one in an evenly divided Senate. In December, his opposition tanked efforts to pass a nearly $2 trillion social-spending measure, called the Build Back Better plan.

The current package under negotiation is a scaled-back version of the Build Back Better bill that still encompasses key legislative priorities, such as provisions for investing in clean energy and climate change initiatives. One of those provisions was a tax credit for clean energy, according to Capital Alpha strategist James Lucier.

The tax credit, along with other clean-energy initiatives, would have benefited the solar energy industry. But the reduced likelihood of additional government support to the sector prompted a pullback from investors on Friday.

Shares of SunPower Corp,
(ticker: SPWR ) dropped 6.9% as the markets opened. Enphase Energy ( ENPH ) shed 6.7%, while First Solar ( FSLR ) fell 12%, SunRun ( RUN ) 13%, and SolarEdge Technologies ( SEDG ) lost 5.6%.

Rising inflation cemented Manchin’s reluctance to support a bigger package. The senator has been vocal over the past few months about his concerns on how increased spending would impact the economy. Consumer prices surged at a 9.1% annual rate in June, the highest rate in over four decades.

“No matter what spending aspirations some in Congress may have, it is clear to anyone who visits a grocery store or a gas station that we cannot add any more fuel to this inflation fire,” he said in a statement on Wednesday, after the June inflation data were released.

Democrats are in a bit of a time crunch, and are pushing to pass the bill before the midterm elections. Party leaders are using a budgetary process called reconciliation to pass the bill, which allows them to bypass the chamber’s 60-vote filibuster with a simple majority vote. Many strategists fear they may lose their majority come November, making this the party’s last shot at passing a broader economic plan.

But Manchin’s opposition could derail negotiations, or at the very least prompt Democrats to give up on some of their main legislative priorities, such as climate change initiatives.

“It is looking more and more as if Democrats will have to pass what they can pass now—a healthcare-focused reconciliation bill,” Lucier wrote.

Manchin said he would favor passing a bill in July that lowered the price of prescription drugs and a two-year extension of Affordable Care Act subsidies. He added that he was willing to reconsider the climate and tax provisions in September, which is the deadline for Democrats to pass the legislation.

“As far as I’m concerned, we’ve had good, absolute conversations, we’ve had good negotiations,” Manchin said.

The senator also said he was open to passing a bill funding energy policy, especially one that invested in technology that would make fossil fuels cleaner, as well as investing in hydrogen-fuel cells.

A spokesperson for Manchin didn’t immediately respond to a Barron’s request for comment.

Write to Sabrina Escobar at [email protected]


Credit: www.marketwatch.com /

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