Senators Chuck Schumer and Joe Manchin secured an agreement on Wednesday that includes around $370 billion for climate programs. However, due to his concern that such legislation would increase deficits and the national debt, Manchin has previously voted against similar efforts to enact climate-related legislation.

Manchin, who favors a “realistic energy and climate strategy,” stated in a press release, “Over the past year, officials in Washington have disregarded repeated warnings about the dire danger of inflation and the implications of massive domestic spending.”

Expenditures are expected to cover tax subsidies for producing sustainable energy and expedited permits for clean energy projects. The utility, solar, and wind industries all benefit from this.

Pre-market trading has seen about 4% and 5% for shares of solar equipment manufacturers Enphase Energy ENPH +17.89 percent (ticker: ENPH) and SolarEdge Technologies (SEDG). 

NextEra Energy (NEE) stock is up over 4% today as it continues to dominate the utility and renewable energy sector.

Due to the company’s breakthroughs in hydrogen fuel cell technology, Plug Power (PLUG) stock has increased by almost 13%. Nikola NKLA +2.96 percent (NKLA) stock is up 2.2 percent as the company develops hydrogen power vehicles for long-haul applications.

The stock price of General Electric (GE) has risen by around 1 percent. A modest fraction of GE’s revenue comes from its wind turbine manufacturing. In international trade, shares of Vestas Wind Systems (VWS.Denmark) are up by more than 14%.

Tax incentives for buying electric vehicles should be part of any agreement. That makes it more affordable to buy an electric car from Tesla (TSLA), Ford Motor (GM), General Motors (GM), or an EV start-up like Rivian Automotive (RIVN) or Lucid Motors (LVMH) (LCID).

Sens. Schumer and Manchin did not immediately reply to requests for comment.

Tesla shares are up around 1.5%. Other electric vehicle manufacturers have no change in their stock prices. On Wednesday, after a 4.1% gain in the Nasdaq Composite due to positive remarks from Federal Reserve Chair Jerome Powell, shares of most EV manufacturers increased by 6.2%.

Once climate legislation is enacted, regardless of its size or details, it should lift a cloud that has been hanging over climate-related equities for months. Now that the foundation for regulation has been set, they can go back to analyzing the core of businesses.

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