What Happened?

Shares of residential solar energy company Sunrun (NASDAQ: RUN) jumped 13.8% in the afternoon session after BMO analyst Ameet Thakkar highlighted positive news from the Senate's "One Big Beautiful Bill Act" (OBBBA). 

The analyst added "For SunRun (RUN), the solar lease eligibility for Section 48E ITCs – Investment Tax Credits – is also unexpectedly back in until 2027-end, and given high short interest and greater dependence on ITCs for residential solar economics to support the company's balance sheet, the firm expects a strong positive reaction."

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What The Market Is Telling Us

Sunrun’s shares are extremely volatile and have had 77 moves greater than 5% over the last year. But moves this big are rare even for Sunrun and indicate this news significantly impacted the market’s perception of the business.

The previous big move we wrote about was 4 days ago when the stock gained 5.3% on the news that reports that Congress may not cut federal tax incentives for residential solar installations. The potential for clean energy tax credits to remain intact, and possibly even be made more generous, has sent a wave of optimism through the solar sector. 

For Sunrun, the continuation of these incentives is crucial as they help make solar energy more affordable for homeowners, directly impacting the company's sales and growth prospects. The news provided a boost to several solar stocks, including Sunrun's rivals. This development follows a recent announcement from Sunrun that it dispatched over 340 megawatts of stored energy from its home battery fleet to support strained power grids during a recent heatwave, showcasing the growing importance of residential energy storage.

Sunrun is down 16% since the beginning of the year, and at $8.57 per share, it is trading 60.1% below its 52-week high of $21.50 from August 2024. Investors who bought $1,000 worth of Sunrun’s shares 5 years ago would now be looking at an investment worth $434.84.

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