Enphase Energy falls after Barclays, BMO cut ratings on solar tax credit concerns

Brokerages Barclays and BMO Capital Markets cut ratings for solar inverter maker Enphase Energy ENPH.O on concerns over potential elimination of Section 25D in the solar energy market

Section 25D is a tax credit for homeowners who buy solar energy systems with cash or a loan

ENPH stock falls 5.7% to $45.19 premarket

Barclays double downgrades ENPH to "underweight" from "overweight", while BMO downgrades to "underperform" from "market perform", cutting price targets to $40 from $51 and $39 from $46 respectively

Barclays believes residential solar market will shift towards third-party owners next year, which could reduce demand for ENPH's products

"We believe elimination of the 25D credit impacts ENPH disproportionately and shrinks the overall demand for U.S. residential solar in 2026" - BMO

As of last close, ENPH stock down 30.2% YTD