Why Solar ETFs Are Shining Today

Solar exchange traded funds (ETFs) are up about 18% today, and some solar stocks are up close to 50%. What’s driving the sharp move upward?

Among the possible reasons:

• China’s efforts to step up its support for solar power is apparently driving the move, says Jay Yarow for Business Insider.
• The New York Times noted renewed interest in the sector that led to a stellar 2008.

More than 1 million shares had already been traded at midday in the Claymore/MAC Global Solar Energy Index (TAN).

Eric Savitz for Barron’s reports that the Chinese government “intends to take a firm attitude to support the local development of solar energy in China.” China didn’t offer specific details or a timeline.

Piper Jaffray’s solar analyst also commented on the sector and China’s plans, saying that it was a positive development, but impossible to quantify. Jesse Pichel said that it’s premature to bid up solar stocks on this news alone, reports Street Insider. Pichel does remain positive on the sector, though.

Both of the solar ETFs have China-based players that are up huge today, including Suntech (STP), LDK Solar (LDK) and Yingli Green Energy (YGE).

• Claymore/MAC Global Solar Energy Index ETF (TAN): down 20.2% in the last three months; China is 26.2% of the fund

• Market Vectors Solar Energy ETF (KWT): down 19.7% in the last three months; China is 22% of the fund