Solar

How to Invest in Solar

Solar power refers to the process of capturing energy emitted by the sun and converting it to a usable form of electricity or other power. Solar power has historically accounted for only a small portion of the global energy market, but some believe the potential of this alternative energy source is significant.

Solar power is not a traditional commodity, and cannot be traded like certain other agricultural or energy resources. Yet the solar power industry is connected directly to various commodities, as adoption of this alternative energy solution will have an impact on numerous commodities.

Investors obviously cannot invest directly in solar power, but there are a number of options available for gaining exposure to the solar power industry. In addition to stocks of companies engaged in production of solar panels and other aspects of solar power production, there are multiple ETFs offering exposure to the space.

Ways to Invest in Solar

There are 2 ways to invest in Solar: ETFs and Stocks. Click on the tabs below to learn more about each alternative.

What are Solar ETFs?

For investors who believe that solar power will account for a greater portion of the global energy market going forward, there are several ETFs that focus exclusively on this industry. Solar power ETFs include the Guggenheim Solar ETF (TAN) and the Market Vectors Solar Energy ETF (KWT). Each of these ETFs includes both domestic and international stocks engaged in various aspects of solar power generation. Component companies include companies that produce solar power equipment and products for end-users, companies that produce fabrication products (such as the equipment used by solar cell and module producers to manufacture solar power equipment) or services (such as companies specializing in the solar cell manufacturing or the provision of consulting services to solar cell and module producers) for solar power equipment producers, and those that supply raw materials or components to solar power equipment producers or integrators.

How to Buy Solar Stocks

Investors seeking exposure to the solar power industry are able to invest in stocks of a number of companies whose operations focus on solar power, including producers of solar panels and firms that focus on solar cell manufacturing. Many solar power companies are located overseas, but there are several companies listed on U.S. exchanges and headquartered domestically as well.

Solar power stocks include:

  • First Solar (FSLR)
  • Yingli Green Energy (YGE)
  • Renewable Energy Corp (REC)
  • Trina Solar Limited (TSL)

For a more thorough list, see the holdings of the Guggenheim solar ETF