While there are several clean energy exchange traded funds (ETFs) out there, none of them have focused solely on one aspect of the sector until now.

Claymore this morning launched the Claymore/MAC Global Solar Energy Index (TAN) on the NYSE Arca. Claymore President Christian Magoon told us the potential for growth in the solar industry is huge. Currently, it accounts for less than 1% of global electricity.

Magoon says in Europe and Asia in particular, there has been a big
push for solar energy. "Europe and Asia have done a good job from a
government standpoint, encouraging people with tax credits and rebates."

In the United States, he says, some local governments are doing some
things to push for more  solar energy and general energy efficiency
over all. In New York, residents receive credits for things like
caulking and weather stripping. There are also personal tax credits of
up to $5,000 for solar energy systems, reports Mindy Pennybacker for Plenty Magazine.

On the national level, Congress is currently dealing with an energy
credit law that’s likely to be passed. If it goes through, all forms of
alternative energy could see a big boost. The proposal would continue
existing tax incentives for producing energy from wind, sunlight and
other renewable resources, reports Benton Ives for the Congressional Quarterly.

"It’s important for people to know there’s a lot of potential in solar," Magoon says.

Over the last 20 years, he says, the cost of solar energy has gone
down about 5% a year, with the last few years being an exception -
demand and the evolution of solar technology has pushed the prices up.

TAN has about 25 constituents, and 25% of those are based in the
United States. There’s more of a focus on Europe and Asia, considered
the leaders in solar energy development. Companies in the fund are
involved in solar equipment, materials and service providers, and they
derive a significant portion of their revenue from solar work.

The fund will have a 0.65% expense ratio, and the index will rebalance quarterly.

Tags: Asia, Energy, Europe, Sector ETFs