What Happened?
Shares of home energy technology company Enphase (NASDAQ: ENPH) fell 5.3% in the afternoon session after TD Cowen downgraded the stock amid broader concerns about the future of solar tax credits. TD Cowen lowered its rating on Enphase Energy to 'Hold' from 'Buy' and slashed its price target to $45 from $58. The firm expressed concern over the potential elimination of the 25D tax credit for residential solar at the end of 2025, which it believes will hurt demand. Analysts noted that Enphase has significant exposure to the customer-owned segment of the solar market, which would be most affected.
Adding to the pressure, reports indicated that President Trump signed an executive order to enforce provisions that scale back tax credits for solar and wind energy, impacting sentiment across the sector. This move compounds existing challenges for the residential solar market, which is already contending with elevated interest rates.
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What Is The Market Telling Us
Enphase’s shares are extremely volatile and have had 47 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
Enphase is down 43.3% since the beginning of the year, and at $40.47 per share, it is trading 67.3% below its 52-week high of $123.65 from August 2024. Investors who bought $1,000 worth of Enphase’s shares 5 years ago would now be looking at an investment worth $736.78.
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