# **U.S. Policy Shift Rocks Indian Solar Giants: What Investors Need to Know**

# **U.S. Policy Shift Rocks Indian Solar Giants: What Investors Need to Know**

## **Introduction**

Indian solar companies, particularly **Waaree Energies** and **Premier Energies**, have seen sharp declines following the **latest U.S. policy proposal** targeting clean energy incentives. With the **removal of federal tax credits** and potential **tariffs on solar imports**, investors must assess the short- and long-term impacts on these stocks.

## **Why Are Indian Solar Stocks Down?**

The recent downturn stems from a tax bill proposed by **former U.S. President Donald Trump**, which aims to **eliminate funding** provided under the **Inflation Reduction Act**. Key policy changes include:

- **Abolishing the 30% federal tax credit** for rooftop solar installations.

- **Reducing subsidies** for residential and small-scale solar providers.

- **Potential tariffs on Indian solar exports**, making them **less competitive** in the U.S. market.

Following this announcement, **U.S. solar stocks crashed**, with firms like **Sunrun** seeing losses of up to **37% in a single session**. Since **Indian manufacturers** rely on U.S. exports, their stocks followed suit:

- **Waaree Energies** stock fell **6.2%** in early trading.

- **Premier Energies** dropped **2.5%**.

## **How Much Do U.S. Sales Contribute to Indian Solar Firms?**

The U.S. market plays a **major role** in the revenues of Indian solar exporters:

- **Waaree Energies** generated **58% of its revenues** from export sales in FY24, with the **U.S. being its key export market**.

- **Premier Energies** derived **8.77% of its total FY24 revenues** from the **United States**.

This heavy reliance on U.S. demand makes these companies **highly vulnerable** to policy changes.

## **Potential Long-Term Effects**

The solar industry could face **major disruptions** if the bill is passed. Some key risks include:

- **Decline in residential solar installations**, making growth slower in the U.S.

- **Job losses in the solar sector**, impacting **over 100,000 workers**.

- **Indian exporters struggling** with shrinking demand and lower margins.

- **Shifts toward utility-scale projects**, with rooftop solar declining.

This bill has **passed the U.S. House of Representatives (215-214)** and is now headed to the **Senate**, making the situation **uncertain**.

## **How Indian Solar Firms Are Responding**

Faced with this challenge, companies like **Waaree** and **Premier** are adapting through:

- **Diversifying into Europe and Southeast Asia**, where incentives remain strong.

- **Expanding domestic sales**, as India’s solar module capacity reaches **100 GW by 2030**.

- **Investing in U.S. manufacturing** to bypass tariffs, such as Waaree's expansion of its **U.S. facility** from **1.6 GW to 3.2 GW**.

- **Negotiating trade agreements** to ease export barriers.

## **Investment Strategies for Shareholders**

If you're invested in **Waaree or Premier**, here’s what you should consider:

- **Monitor Senate developments**—the bill isn’t law yet.

- **Evaluate long-term viability**, as Waaree and Premier shift strategies.

- **Watch for tariff changes**, which could further impact exports.

- **Diversify portfolios**, balancing solar investments with battery storage firms.

- **Look for buying opportunities**, as these stocks may recover if adaptation plans succeed.

## **Conclusion**

The U.S. tax bill could **reshape the global solar industry**, with **Indian exporters** feeling the heat. While challenges lie ahead, firms like **Waaree and Premier** are actively shifting strategies to mitigate risks. Investors should **closely track developments**, diversify, and make informed decisions based on evolving market conditions.