Solar sector stocks and exchange traded funds are seeing clear skies and brighter days as photovoltaic panel makers try to keep pace with rising demand.
Year-to-date, the Guggenheim Solar ETF (NYSEArca: TAN) has gained 21.9% while the Market Vectors Solar Energy ETF (NYSEArca: KWT) gained 12.3%. [Sun Rising or Setting on the Solar ETF?]
Solar panel installations are expected to jump 29% this year, and companies are facing the first supply shortfall since 2006, reports Ehren Goossens for Bloomberg.
The improved demand and supply fundamentals will benefit some of the largest manufacturers, such as Yingli Green Energy Holdings (NYSE: YGE) and Trina Solar (NYSE; TSL). TAN has a 4.1% position in TSL and a 3.9% position in YGE. KWT includes 1.6% in YGE and 2.5% in TSL. [China Steps up to Lift Solar ETFs]
“It would be fair to say our panels are in short supply,” Tom Werner, CEO of SunPower Corp. (NasdaqGS: SPWR), said in the article.
TAN includes a 4.8% weight in SPWR and KWT has 5.2% in SunPower.
The solar industry has suffered through a two-year slump due to a global glut in supply. Consequently, the oversupply pushed down prices, causing greater competitiveness in the industry, forcing some to go bankrupt and bolstering demand.