Sumit Roy
2 min read
Alternative energy ETFs plunged on Tuesday after the Senate released a draft of its version of the so-called “Big, Beautiful Bill,” a sweeping legislative package that, like the House version passed last month, proposes deep cuts to renewable energy subsidies.
The iShares Global Clean Energy ETF (ICLN) and the Invesco Solar ETF (TAN) were down 4.5% and 9.5%, respectively, midday. The selloff was driven by language in the bill that accelerates the phaseout of clean energy tax credits originally established under the Inflation Reduction Act.
Under President Joe Biden’s original law, tax credits for solar and wind projects were set to gradually phase out starting in 2032. But the Senate bill would begin scaling them back much earlier.
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Powered by Money.com - Yahoo may earn commission from the links above.According to the bill’s summary, “For investments in wind or solar technology, the provision begins phasing out in calendar year 2026, with credit values for such investments the construction of which begins in 2026 receiving only 60 percent of the value of the credit. In 2027, these investments receive only 20 percent of the credit, and by 2028, there is no longer an investment tax credit for these technologies.”
However, not all clean energy sectors were hit equally by the Senate draft. It was more generous toward other technologies like nuclear, hydropower and geothermal, extending the availability of tax credits into the next decade.
“For all other qualified facilities, such as hydropower, nuclear and geothermal, the provision phases out as if the ‘later of’ rule did not apply, with these facilities receiving 100 percent of the credit for qualified facilities the construction of which begins in 2033, 75 percent in 2034, 50 percent in 2035 and 0 percent in 2036,” the bill summary reads.
That’s a notable improvement from the House version, which required nuclear projects to begin construction by 2028 to qualify.
The Range Nuclear Renaissance ETF (NUKZ), which has surged in 2025 amid renewed interest in nuclear power, traded down less than 1% on the day, far outperforming its solar and wind counterparts.
