US solar stocks welcome the "last train effect" of subsidies? AI "swallows electricity" collides with soaring oil prices, and states in the United States quickly loosen project approval restrictions.

With a key federal tax incentive policy entering the final three months of the application countdown, utility regulators and power developers in multiple states across the United States are racing against time to secure federal subsidies worth billions of dollars. This is not only a "salvage excavation" targeting the legacy of the Biden era but also an effort to alleviate the increasing pressure of rising electricity prices due to the surge in artificial intelligence (AI) computing power. According to current regulations, CECEP Solar Energy, wind energy, and storage projects must meet strict deadlines to qualify for up to 30% Investment Tax Credit (ITC): projects must officially start construction before July 4th of this year (U.S. Independence Day) and be completed and connected to the grid within four years of starting construction. The urgency of this timeframe is forcing states to streamline the usual approval processes. Amid rising electricity costs and the surge in AI power usage, Clean Energy Fuels Corp. has become a possible solution. Recently, escalating tensions in the Middle East have directly triggered increases in energy bills for U.S. Energy Corp. According to data from the U.S. Energy Corp. Information Agency (EIA), in the first quarter of 2026, Brent crude oil futures prices soared from $61 per barrel at the beginning of the year to $118 per barrel by the end of the quarter, marking the largest quarterly increase since 1988 after adjusting for inflation. Against this backdrop, accelerating the development of CECEP Solar Energy, wind, and storage projects that are not affected by international fuel price fluctuations has become a key option for lowering electricity costs and gaining votes. Behind the rush by states to qualify for federal subsidies is the political sensitivity of electricity prices in the 2026 U.S. election year and the explosive growth in electricity demand from data centers. Recent increases in electricity bills for residents across the U.S. are expected to become a core issue in the battle for swing states by both parties. At the same time, the widespread adoption of AI technology is rapidly increasing the demand for baseline power. Industry analysts predict that by 2030, the share of electricity consumption by U.S. data centers could more than double to over 9% of total national electricity consumption. In this context, the 30% Investment Tax Credit is seen as a "pressure relief valve" to lower the overall cost of electricity generation. William Walsh, Vice President of Energy Procurement and Management at Southern California Edison, bluntly stated, "It is critical to secure projects that meet these credit terms, primarily for the sake of customers' affordability." According to calculations, for example, Xcel Energy's 3.2 gigawatt wind and solar storage project approved in Colorado could receive around $5 billion in tax credits and additional incentives, directly reducing the overall installation cost of the project by 39%. This cost reduction will ultimately be passed on to ordinary households and businesses through electricity prices. George Hershman, CEO of CECEP Solar Energy based in San Diego, and battery developer SOLV Energy, expects the explosive growth of data centers to be the biggest driving force for renewable energy projects. He said, "The opportunities brought by energy demand are greater than the opportunities brought by the phased cancellation of tax credit policies." Regulatory easing: Blue states and swing states accelerate approvals Faced with only a few months left in the window, blue states and swing states setting carbon emission reduction or renewable energy generation goals are taking rapid action to qualify for tax incentives. Developers can use these incentives to offset their tax obligations or sell them to investors. California has taken a mandatory regulatory-driven approach. Earlier this year, the California Public Utilities Commission (CPUC) issued a rare order requiring power providers like Southern California Edison to add 6 gigawatts of Clean Energy Fuels Corp. by 2030 to 2032 and explicitly instructing developers to "pursue feasible projects that still meet the federal tax credit requirements." William Walsh said that this scale would be enough to meet the electricity needs of over a million households, with most of the capacity coming from CECEP Solar Energy storage projects that have entered the grid queue. Colorado and Minnesota are leaning towards a pragmatic cost accounting approach. The Public Utilities Commission of Colorado quickly approved Xcel Energy's proposed 3.2 gigawatt new project package in February, with the company expecting these projects to be operational by the summer of 2029. Robert Kenney, President of Xcel Colorado, pointed out that with the surge in demand from new data centers, "we need to significantly increase our power capacity, and it is widely recognized that these tax incentives must be obtained." New York, New Jersey, and Oregon are focusing on streamlining administrative approval processes. Governors are issuing executive orders or pushing for emergency legislation to clear the longest-standing land use and environmental assessment obstacles for feasible projects that qualify for federal tax incentives. This is an attempt to address the more fatal "bureaucratic obstructions" than funding shortages. Risks and concerns: Execution challenges within the four-year timeframe Despite the enthusiasm for the rush to qualify, industry experts warn that qualifying for subsidies is just the beginning, and transitioning from a permit to physical grid connection within four years still faces multiple uncontrollable risks. Supply chain bottlenecks are the primary threat. Critical electrical equipment such as large transformers and high-voltage circuit breakers in the U.S. market currently have delivery cycles of up to two to three years. If delays in equipment deliveries result in projects not being completed within four years, the IRS has the discretion to withdraw tax credit eligibility, which could instantly break the fragile financial models of projects. Secondly, although some states are trying to expedite approval processes, public hearings and complex environmental assessments at the local community level could still lead to project stalls in the "last mile." Tom Hunt, CEO of Pivot Energy based in Denver, admitted, "Everyone is working to move forward quickly, but some factors are beyond the developers' control." It is worth noting that storage projects have a more lenient deadline (start construction by the end of 2033), but site selection and permits in the early stages are still lengthy. For states across the U.S., this is not only the last opportunity to seize federal funds for boosting the grid, but also a test of administrative efficiency and engineering execution in a race against time. Impact on the U.S. solar sector While rising oil prices and increasing electricity demand from AI provide a long-term growth narrative for the industry, the U.S. solar sector is currently at a critical crossroads: policy-driven rush to install is driving the sector's growth against the tide, but structural risks such as subsidy reductions, tariff barriers, and oversupply cannot be underestimated. So far this year, the Invesco Solar ETF (TAN.US) has risen by as much as 11%, with a cumulative increase of nearly 60% since President Trump's re-election, outperforming almost all sectors in the market except for energy. The strongest support for this round of the solar market largely comes from unprecedented rushes initiated by developers to lock in the 30% Investment Tax Credit. Wood Mackenzie predicts that U.S. developers could hoard up to 216-240 gigawatts of solar components before the July 4, 2026 deadline, enough to meet all expected installation demand in the country by the end of this decade. At the same time, the energy storage sector has been granted a more lenient policy windowstorage projects that start construction before the end of 2033 can still enjoy tax incentives, creating longer-term growth certainty for companies focusing on storage. In addition, the conflict in the Middle East resulting in intense oil price fluctuations has vividly exposed the fragility of the fossil fuel supply chain. In a report released on April 11th, Goldman Sachs Group, Inc. explicitly stated that the conflict in the Middle East is reshaping the global energy landscape, giving CECEP Solar Energy a structural bullish rating. The core logic behind this assessment is that the significant rise in oil prices has triggered collective anxiety about "energy security" among countries worldwide, and the vulnerability of traditional fossil fuel supply chains has been exposed in conflicts, making new energy sources represented by solar power likely to become indispensable "rigid demand" in the global energy structure due to their autonomy and stability. However, this concentrated rush to install has brought immediate order growth, but it has also raised concernswhen developers hoard enough components to meet demand for several years, subsequent new orders may slow down significantly. Additionally, the sector faces risks related to tariffs and the phase-out of other subsidies. Southeast Asian tariffs continue to escalate: The U.S. Department of Commerce has imposed high anti-dumping/countervailing duties on solar products from Malaysia, Cambodia, Vietnam, and Thailand, with some maximum rates reaching an astounding 3521.14%. In addition, preliminary tariffs of 125.87% are facing solar products from India, 104.38% from Indonesia, and 80.67% from Laos, with final rulings expected in July. Significant reduction in residential market subsidies: Starting January 1, 2026, the federal government will no longer offer a 30% Investment Tax Credit for homeowners installing CECEP Solar Energy systems. Ohm Analytics has significantly reduced its forecast for residential CECEP Solar Energy installations from a projected increase of +8% to an annual decrease of 20%, with Wood Mackenzie also estimating installations could drop to the lowest point since the onset of the COVID-19 pandemic in 2020. Continued legislative games: A bill passed by House Republicans to terminate Clean Energy Fuels Corp. tax incentives triggered a collective plummet in the sector, with Sunrun dropping over 35% in a single day, and Enphase and SolarEdge falling by around 18%. While the bill is facing modification in the Senate, its existence itself remains a continued source of negative sentiment in the market. Overall, the rush to qualify for tax incentives and the policy-driven installation spree have brought immediate growth to the solar sector. However, the sector faces structural risks such as tariff barriers, anticipated subsidy reductions, and oversupply. The future trajectory of the sector will depend on how these risks are managed and navigated in the coming years.