Vestas shares soar on updated U.S. tax credit rules

Investing.com -- Shares in wind turbine maker Vestas Wind Systems (CSE:VWS) soared more than 11% on Monday, driven by the updated U.S. guidance on renewable tax credits.

The new rules clarify how projects can qualify under the One Big Beautiful Bill’s safe-harbor provision, which allows assets that begin construction before July 4, 2026, to access the more generous Inflation Reduction Act (IRA) credits.

According to RBC Capital Markets analysts, the change benefits Vestas, easing earlier concerns about stricter qualification requirements.

The broker maintained its Outperform rating on the stock with a price target of DKK 128.

The uncertainty over the definition of project commencement had been holding back order activity, RBC said.

The guidance follows the U.S. Treasury’s release of Notice 2025-42, which sets updated criteria for when construction is deemed to have started on renewable projects eligible for ITC and PTC credits.

For most projects, developers can no longer rely on the so-called 5% Safe Harbor based on early expenditures alone.

Instead, they must demonstrate “physical work of a significant nature,” such as foundation excavation, concrete pouring, or the manufacture of wind turbine components tied to specific contracts.

In addition, projects must maintain continuous activity over a maximum of four calendar years, though exceptions apply for external delays like permitting or grid connections.

“All in all, we see this as a fairly positive development vs earlier fears of more stringent restrictions,” RBC analysts led by Colin Moody said.

They added that qualification rules “seem largely manageable, and we expect OEMs and their customers will be able to shuffle workloads around to ensure maximum qualification until 2030-end.”

While Vestas has already booked some U.S. orders, RBC expects the tax credit update to provide “incremental impetus” to further activity.