How to invest behind the sweeping climate and health care package that could soon become law

Published Mon, Aug 8 20224:32 PM EDT

The Senate just passed the most ambitious climate spending package on record, and there are a host of companies across the renewable energy ecosystem that could benefit. Solar power and other clean energy providers along with electric vehicle makers and some energy and health care companies stand to benefit from the massive bill. The Inflation Reduction Act, which the Senate passed Sunday, will now head to the House of Representatives, earmarks some $369 billion in spending around energy security and emissions-reducing technologies. The legislation also includes health-care funding. The bill's passage follows months of stalled negotiations in Washington around the Build Back Better plan. Sen. Joe Manchin (D-W. Va.) staunchly opposed that package, so it could have failed in the Senate after passing the House. But at the end of July, Senate Majority Leader Chuck Schumer, (D-N.Y.), and Manchin announced a surprise deal around a compromise package. In a bid to appease Manchin, the bill also includes incentives for oil and gas companies. Here's who could benefit: Solar Clean energy, including the solar industry, is a major beneficiary of the spending, which includes $60 billion in incentives to spur domestic manufacturing. The package would extend the Investment Tax Credit, which has been instrumental to the U.S. solar industry's growth, at 30% for 10 years. "The long-term nature of the tax credits is incredibly important as it provides visibility for industry players to invest in the supply chain here in the U.S.," said Jos Shaver, managing partner and chief investment officer at Electron Capital. Sunrun , Sunnova and SunPower are among the residential solar installers that could see a lift from more homeowners opting for rooftop panels. Inverter makers SolarEdge and Enphase Energy also stand to benefit. The provisions in the package also seek to encourage domestic manufacturing, potentially boosting shares of First Solar and Maxeon Technologies , which make solar panels. JPMorgan Chase upgraded shares of First Solar on Monday based on the production tax credits outlined in the IRA. "We view the Inflation Reduction Act as the largest policy change in US histor