Solar energy stocks dropped sharply on Tuesday as the market digested cuts to renewable power tax credits in the Senate's version of the budget bill.

Shares of US solar companies fell sharply after Senate Republicans released a bill that would end clean energy tax credits earlier than expected, dashing hopes that major cuts passed by the House wouldn’t stick.

Solar stocks slid after Senate Republicans detailed revisions to the House's tax-and-spending bill that included fully phasing out wind- and solar-tax credits. The Senate's plan would see credits phased out from 2026,