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 are tumbling after the Senate maintained the full removal of clean-energy tax credits in the budget bill, even as it reportedly extended the time frame for the phaseout beyond the Republicans’ proposals.