The latest political developments in Washington, D.C., cast a shadow over renewable energy stocks on Monday. Reacting to news that very late-stage revisions to the One, Big, Beautiful Bill would impose a new set of taxes on the solar and wind segments, investors traded out of energy companies involved in those niches.
One victim was the renewables-embracing AES Corporation (NYSE: AES), whose shares took it on the chin with a nearly 2% decline on the day. Meanwhile, the benchmark S&P 500 index closed Monday 0.5% higher.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »
Big, beautiful… and still controversial
In an attempt to get the controversial bill into sufficient shape to maximize its chances for passing, Republican senators on Monday introduced taxes for certain wind and solar projects. Earlier versions of the bill only brought forward the expiration dates of current tax incentives for these forms of energy.
Image source: Getty Images.
As of midafternoon Monday, senators were to discuss and vote on numerous amendments to the bill, including the proposed renewables taxes.
Although AES is not a pure-play renewable energy company, it has enthusiastically embraced such forms of power generation. At the moment, 52% of the company’s total deployed power assets fall under the renewable umbrella.
The threat of higher costs
That diversification is likely a main reason why the investor reaction to the news wasn’t more drastically negative. If those proposed new solar and wind levies make their way into the final bill and it’s passed, AES will still have plenty of traditional power assets that won’t (at least for now) be subject to them.
What’s more concerning for the long term is that, like many old-line power companies making a shift to green energy, AES has poured billions of dollars into developing renewable solutions. The proposed withdrawal of tax incentives in the bill were concerning enough; the company could be looking at rather significant tax bills once its in-development projects come onstream.
Should you invest $1,000 in The AES Corporation right now?
Before you buy stock in The AES Corporation, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and The AES Corporation wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $713,547!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $966,931!*
Now, it’s worth noting Stock Advisor’s total average return is 1,062% — a market-crushing outperformance compared to 177% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.
See the 10 stocks »
*Stock Advisor returns as of June 30, 2025
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
