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Making Green With Solar Energy ETFs

Why a Solar Energy ETF May be a Fit for Your Portfolio


In the immortal words of that cute, little frog, “It ain’t easy being green.” And while that’s especially true in the United States, that could change. Tax credits from the government and concerns about oil prices and an energy crisis indicate that the popularity of solar energy is on the rise. So there might be a chance to capitalize with some solar energy ETFs.

Solar Energy ETFs vs. Oil ETFs

While your gas tank might not be thrilled with the rise in oil prices, your long oil ETFs may sing a different song. However, as the price per oil barrel increases many people are looking for alternative types of energy to save money. That’s when you as an investor should be looking for alternative types of energy ETFs.

You may want to look no further than solar energy ETFs. At some point you are going to cash in on your oil earnings by selling your oil ETFs and taking some profits. With that extra income you might want to consider re-investing in the emerging energy market with some energy ETFs. Or if you are short oil ETFs, solar energy ETFs could be a semi-hedge with the hope that solar energy popularity will increase as gas prices rise.

Solar Energy ETFs in U.S. and Abroad

We are not in denial. We as a country know it’s true. Our green efforts are…lacking (to be kind). However, there is a lot of potential for growth. We see commercials about companies offering green IT services, we read articles about the dangers of plastic water bottles, and we hear how alternative energy like solar power will help prevent an energy crisis. So, there is a lot of room improvement.

This means there is a lot of room for your portfolio to improve as well. As the United States and other countries try to catch up to “green conscious” country’s like Germany and Japan, that makes the U.S. a pseudo-emerging solar energy market. That might mean it is a good time to “buy low” and purchase some solar energy ETFs. Solar energy ETFs might even be a nice compliment to the foreign ETFs that are already part of your ETF trading strategy.

Solar Energy ETFs and Taxes

There’s no doubt that there are tax benefits that come with ETFs. But on top of that the government is giving people tax breaks when they attempt to go green. Rebates for home and solar-related improvements like replacement windows, home energy assessments, lead paint training, and solar pool heaters can only help the popularity of solar energy and potentially boost the long solar energy ETF position in your portfolio.

Choosing a Solar Energy ETF

If you are ready to get started with solar energy ETFs, here are a few funds to watch and see how they react to various market conditions. Always conduct thorough research before implementing any ETF investment strategy and make sure you understand the risks and advantages of your ETFs as well.

  • KWT - The Market Vectors Solar Energy ETF
  • TAN - The Claymore/MAC Global Solar Energy ETF
  • Looking for other Energy ETFs? Here's a List of Energy ETFs.

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