European renewable stocks to watch as U.S. megabill hangs in the balance
Among the myriad details stuffed within U.S. President Donald Trump’s bumper “big beautiful bill,” European investors have been keeping an eye on one in particular — renewable energy policy. Shares of the region’s wind power firms gained on Wednesday after Senate lawmarkers narrowly approved a heavily amended version of the package . The move higher continued Thursday as the U.S. House began a final debate on the megabill — after a dramatic night of voting that was nearly derailed by Republican defections. Turbine manufacturer Vestas was 3.4% higher in early trade Thursday after gaining more than 10% in the previous session. Windfarm operator Orsted and turbine maker Nordex , meanwhile, built on Wednesday’s gains to both trade over 2% higher early Thursday. The bill’s current revisions are a relief to a sector already grappling with funding challenges, competition from China and tariff uncertainty. Among the key amendments to the bill is the removal of a tax on wind and solar projects that use components from “foreign entities of concern” — understood to primarily mean China — which analysts said could have a chilling effect on new orders in the sector more broadly. Another major revision relevant to European renewables firms is the removal of a controversial cliff-edge deadline that would have required all projects benefiting from tax credits to be in service by the end of 2027. Now, all projects commencing before mid-2026 will be eligible, which analysts at Citi said was likely to spur a flurry of near-term activity, as all a project must do to “start” is spend 5% of capital. U.S. clean energy shares also rose on this news this week. If the bill is voted through in its current form, the change “will lay the foundation for a solid American onshore wind turbine market in the years after 2027 — and not an ‘almost complete stop’ in 2028, which the previous text has a high inherent risk of. This seems like a gigantic relief for the onshore wind market in the U.S.,” Sydbank analysts said. U.S. importance Tancrede Fulop, senior equity analyst and renewables expert at Morningstar, said the bill amendments, along with a resumption of construction work on Equinor’s Empire Wind project off the New York coast, “suggests that the worst-case scenario for the renewables sector under the Trump administration may not materialize.” The U.S. market plays a pivotal role for Europe’s largest renewable developers such as RWE , EDPR and Iberdrola , according to Morningstar’s Fulop. It accounts for around 50% of the installed renewable capacity of the former two, and around 40% of the latter. However, while wind developers could potentially offset any phase out of tax credits by selling power at higher prices or pressuring manufacturers to cut their prices, manufacturers such as Vestas — which has 35% of its onshore wind backlog in the U.S. — and Siemens Energy are more vulnerable, Fulop said. Pierre-Alexandre Ramondenc, equity research analyst for utilities and renewables at AlphaValue, told CNBC that the positive market reaction reflected the fact that the Senate’s amendments were broadly good news for the sector. But overall, Trump’s bill “largely dismantles the core mechanisms supporting clean energy” under President Joe Biden’s Inflation Reduction Act, he said. Rather than fully repealing provisions that have been established and generated business activity under the IRA, the new megabill puts fresh constraints on the sector. The primary blow is to the U.S.’ efforts to modernize its grid infrastructure and lead in decarbonization efforts, he continued. In Europe, the market has already been revising down its expectations for U.S. renewables since Trump’s election, Ramondenc noted, with the main risk now being the cancellation of projects already under construction. European utilities also have “flexibility in deploying capex across different technologies and geographies,” he added. — CNBC’s Erin Doherty contributed to this report.
