ETF Spotlight: Solar Energy

Includes: KWT, TAN
by: Tom Lydon

Investors have sought out Chinese markets to capitalize on this global engine of growth, and now solar companies are expanding into China's photovoltaic market. In the meantime, exchange traded fund investors can play the expansion through solar-related funds.

First Solar (NASDAQ:FSLR) will supply 2 megawatts of its thin-film solar panels for use in western China and SunPower Corp. (NASDAQ:SPWR) will invest $15 million to build and install concentrating solar-power systems in Inner Mongolia and other regions in China, reports Christopher Martin for Bloomberg.

Sanjay Shrestha, an analyst at Lazard Capital Markets, expects the deals to boost sales in China, which is projected to become the largest solar market in 2013.

"China has the potential to be a major market for solar and this gets them a foot in the door," Shrestha said in the article. "You don't want to ignore the Chinese market but it's difficult to say whether there will be any profit opportunity."

China will install at least 3,980 megawatts of solar panels in 2013, pushing the country past Germany and Italy, the top two markets this year.

Solar ETFs include:

  • Guggenheim Solar ETF (NYSEARCA:TAN): FSLR is 9.6%; SPWR is 5.0%
  • Market Vectors Solar Energy ETF (NYSEARCA:KWT): FSLR is 14.4%; SPWR is 4.7%

Guggenheim Solar ETF

(Click to enlarge)

Max Chen contributed to this article.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates.