(The opinions expressed here are those of the author, a

columnist for Reuters.)

By Gavin Maguire

LITTLETON, Colorado, June 18 (Reuters) - Energy equity

investors are adjusting positions across the U.S. power sector

in an attempt to pick winners and cut losers ahead of the final

passing of President Donald Trump's tax-and-spending bill.

The "One Big, Beautiful Bill Act" contains aggressive cuts

to several tax credits and incentives tied to clean power

generation from renewable energy sources, and has sparked an

aggressive selloff in stocks tied to the sector.

The bill would also accelerate the phase-out of federal

support for electric vehicles, clean energy component

manufacturing and wind farm development.

However, the latest U.S. Senate proposals - which tweaked

the version previously passed by the U.S. House - preserve

support for nuclear, geothermal and battery storage projects,

and sparked gains in stocks tied to nuclear power.

Additional adjustments to the bill proposals are likely

before it can be passed into law by Congress, sparking more

position jostling by energy investors in the weeks ahead.

Below is a breakdown of the key energy sector

exchange-traded funds (ETFs) and equities that have and will be

most impacted by the proposed budget.

SOLAR SOCKED

Stocks tied to companies engaged in the production of solar

panels and inverters and in the installation of solar systems

stand to be among the biggest losers once the proposed bill is

passed, regardless of its final make-up.

The Trump administration and many Republican lawmakers are

against federal subsidies for solar power for several reasons,

including concerns about its intermittency and its heavy

reliance on components made in China and elsewhere.

The Senate's recent budget bill proposal phases out several

key solar tax credits and subsidies from 2026, and would

eliminate them entirely from 2028.

As the solar sector has already been hit by rising interest

rates - which lifted the cost of system installations - the

speedy gutting of federal support has greatly dimmed the

prospects for several companies in the space.

Stocks in solar inverter manufacturer Enphase and

panel makers First Solar ( FSLR ), Sunrun ( RUN ) and SolarEdge ( SEDG )

have all dropped by 20% or more within the past month

as ramifications of the bill proposals were digested.

Shares in the Invesco Solar ETF plumbed five-year lows

in April, and are down more than 50% over the past two years as

investors jettisoned positions and the sector's outlook darkened

under the anti-renewables Trump administration.

NUCLEAR AND GEOTHERMAL

Several energy investors looking to get out of the solar

space have pivoted their funds into the nuclear power sector,

which has gained support under the current Trump administration.

The Global X Uranium ETF has gained more than 35% in

value over the past month, and recently scaled its highest

levels in more than a decade.

Investors have been drawn to the fund by the likelihood of a

tightening in the supply of uranium - the main fuel used by

nuclear power plants - should more reactors get commissioned

once the tax bill becomes law.

Stocks in companies tied to geothermal energy production

have also rallied recently as provisions tied to supporting the

sector were preserved in the latest round of bill wrangling.

Shares in Nevada-based Ormat Technologies ( ORA ), which

makes power converters for geothermal plants, are up more than

30% since early May.

MAJORS, GRIDS AND LNG

Energy investors have also recently increased positions in

funds and companies within the traditional oil and gas sector,

as the gutting of clean energy subsidies will likely increase

demand for fossil fuels.

Shares in the SPDR Energy Select Fund - which holds

several major oil and gas producers - have rallied on the recent

tensions in the Middle East and due to the brighter outlook for

U.S. gas demand if renewable generation is stalled.

Firms with large natural gas production businesses stand to

gain further if the proposed bill slams the brakes on renewable

power growth and increases the U.S. power sector's dependence on

gas.

Shares in the companies tied to the liquefied natural gas

(LNG) sector have also fared well lately due to the Trump

administration's support for expanding LNG exports.

Shares in Cheniere Energy - the top U.S. LNG

exporter - are up around 10% year-to-date and over 50% over the

past year.

Investors have also increased their exposure to ETFs and

companies dedicated to upgrading the U.S. power grid, which have

upbeat outlooks regardless of how the final tax bill looks.

The First Trust Smart Grid Infrastructure Fund is

up around 12% year-to-date, while the First Trust North American

Energy Infrastructure Fund is up about 4%.

Going forward, investor interest is likely to also grow in

the battery storage sector, with the iShares Energy Storage and

Materials ETF already on investors' radars.

The fund has dropped around 5% in value so far this year due

in part to the dimmed outlook for solar power growth, which

utilities pair with battery systems to ensure round-the-clock

supplies.

But in the months ahead utilities will still likely increase

their use of battery systems even if they slow their uptake of

new solar systems, as the solar-plus-battery combination remains

the fastest route to deliver new power to U.S. grids.

The opinions expressed here are those of the author, a columnist

for Reuters.

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