May 22 - Solar-related shares tumbled Thursday after House Republicans passed a tax proposal that would eliminate key clean energy incentives.

Sunrun (NASDAQ:RUN), a leading residential solar installer, plunged more than 35% as the bill targets tax credits tied to leased rooftop solar systems, an arrangement used by roughly 70% of the industry, according to Guggenheim analyst Joseph Osha.

Warning! GuruFocus has detected 8 Warning Signs with RUN.

Enphase Energy (NASDAQ:ENPH) and SolarEdge Technologies (NASDAQ:SEDG), which sell inverters for solar installations, dropped about 16% and 24%, respectively. Utility-scale solar developers were also hit, with Array Technologies (ARRY) down more than 13% and Nextracker (NASDAQ:NXT) off over 6%.

The legislation would end investment and production credits for clean energy projects that start construction 60 days after the bill becomes law or enter service after Dec. 31, 2028. Jefferies analysts described the plan as taking a sledgehammer to the Inflation Reduction Act.

First Solar (NASDAQ:FSLR) slid just over 3%, outperforming peers, as its domestic manufacturing operations would likely remain eligible for tax support. Manufacturing-related credits were largely unaffected by the proposal.

The bill now heads to the Senate, where revisions are expected.

This article first appeared on GuruFocus.

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