Why Sunrun (RUN) Stock Is Getting Hammered

Sunrun Inc RUN shares are trading lower by 28% to $12.18 during Wednesday’s session in early trading on Wednesday following the election of Donald Trump as the 47th U.S. president.

Trump’s victory, along with the Republican Party's renewed control of the Senate and lead in the House, signals a likely reversal of green energy policies that have directly benefited Sunrun and other companies in the renewable sector.

What Happened: Trump’s campaign platform included repealing green energy tax credits and reducing regulatory support for climate initiatives; Sunrun investors may appear deeply concerned about the potential loss of critical tax incentives that may have stimulated growth in residential solar installations.

Currently, the Federal Investment Tax Credit, which offers a 30% tax credit for solar installations, supports the solar industry. Trump's plans to remove or phase out such incentives could significantly dampen demand for residential solar systems, directly impacting Sunrun’s revenue and growth prospects.

Sunrun could face significant headwinds in a regulatory environment hostile to renewable energy. During his campaign, Trump was explicit about his preference for fossil fuels and has previously promised to scale back federal support for renewables, labeling green energy subsidies as burdensome and unnecessary.

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This rollback would likely lead to higher costs for customers considering solar power, making it harder for Sunrun to remain competitive, especially in states without their own strong clean energy incentives.

What Else: The Trump administration's tariff plans on key imported goods could also hurt Sunrun's supply chain and increase costs. Trump's proposed universal 10% tariff on all imports, coupled with a potential 60% tariff on Chinese goods, could sharply increase the cost of solar panels and components.

Although Sunrun manufactures some equipment domestically, it still relies on international suppliers to meet demand. Rising costs in its supply chain would put pressure on the company's margins and could force it to increase installation prices, further dampening consumer interest at a time when the company's growth strategy is based on affordability and accessibility.

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Another area of concern for Sunrun is the potential shift in environmental regulatory policies. During his previous term, Trump rolled back numerous environmental protections, including those aimed at reducing greenhouse gas emissions, and exited the Paris Climate Agreement.

A renewed emphasis on fossil fuels and reduced federal support for emissions cuts could erode the momentum that Sunrun and the broader solar industry have gained over recent years as consumers have increasingly sought clean energy alternatives.

Without the federal backing for clean energy initiatives that Sunrun and its peers rely on, the industry could see a slowdown in growth, with potential ramifications for jobs and innovation within the U.S. solar sector.

According to data from Benzinga Pro, RUN has a 52-week high of $22.26 and a 52-week low of $8.82.