Last year, financing seized up and demand went off a cliff. Today, demand for solar modules, a unit of interconnected solar cells, is so high that most of the industry is sold out. Germany is leading the way, making up about 36% of market demand. France, Italy, the United States and Japan are seeing their own demand rising quickly, reports Jessica Rao for CNBC.

On the supply side, the shortage of polysilicon, the building block for solar panels, is a thing of the past. (Why solar ETFs will shift to a brighter future). A massive oversupply of the material is anticipated over the next three years, giving solar panels a dramatic drop in cost to produce, and therefore utilize. This could lead to greater adoption of solar energy on the consumer level. (Read about the green energy sector here).

For more stories about solar energy, visit our solar category. If you want the scoop on anything and everything energy-related, sign up for our newest special report.

• Market Vectors Solar Energy ETF (NYSEArca:KWT): down 5.4% year-to-date



• Claymore/MAC Global Solar Energy (NYSEArca: TAN): up 1.7% year-to-date

ETFs are a good way for investors to capitalize on policy initiatives of the Obama administration while reducing the day-to-day volatility compared to other investment options, such as stocks, remarks Daniel Harrison for IndexUniverse. (Play Obama’s new energy plan).

Health Care opportunities. Jim Oberweis, chief executive of Oberweis Asset Management, believes that “there is a possible positive [outcome] for pharmaceutical companies” since sales of prescription drugs will increase as health care coverage widens. Furthermore, Oberweis argues that health care providers may benefit from more patient visits and biotechs are in a more positive position than previously thought. (More on the health care sector).

Broad-based and niche market ETFs that could benefit from the growth in the number of patients receiving coverage include:

• Health Care Select Sector SPDR (NYSEArca: XLV): up 14.3% year-to-date
• iShares Dow Jones U.S. Healthcare (NYSEArca: IYH): up 15.1% year-to-date
• iShares Dow Jones U.S. Medical Devices (NYSEArca: IHI): up 32.4% year-to-date; IHI is well-diversified, with 58% of assets under management in its top 10 holdings, and a maximum single-stock weighting of 10%. Companies included should benefit from the increase in the number of hospital patient visits.
• PowerShares Dynamic Pharmaceuticals (NYSEArca: PJP): up 10.3% year-to-date; PJP is a well-diversified ETF on large, mostly dividend-paying pharmaceutical companies that have lots of cash on hand and may see an increase in sales of core prescription drugs.
• SPDR S&P Pharmaceuticals (NYSEArca: XPH): up 19.2% year-to-date; XPH is more broadly diversified.
• iShares Dow Jones US Pharmaceuticals (NYSEArca: IHE): up 22.2% year-to-date; IHE focuses more on the oversold traditional pharma brands like PJP.
• SPDR S&P Biotech (NYSEArca: XBI): down 4.3% year-to-date; XBI is well-diversified, with 45% of its funds invested in its top 10 holdings. The fund is also mostly invested in nontraditional pharma companies.
• iShares Nasdaq Biotechnology (NasdaqGM: IBB): up 11.2% year-to-date; IBB has a higher weighting in its top holdings and it focuses exclusively on Nasdaq-listed securities; some large biotech companies may be excluded.

Clean energy. It is no big secret that clean energy is a big policy initiative of the Obama administration. The more notable technologies being pushed into the forefront of the sector are nuclear and solar energy. Solar tech investing is still considered risky because of the industry’s mini boom/bust cycles, but ETFs help minimize volatility. (More on alternative energy).

• Market Vectors Solar Energy ETF (NYSEArca: KWT): down 6.5% year-to-date
• Claymore/MAC Global Solar Energy (NYSEArca: TAN): up 0.3% year-to-date
• Market Vectors Nuclear Energy ETF (NYSEArca: NLR): up 19.7% year-to-date

Max Chen contributed to this article.

Why?

• Solar energy is becoming cheaper and more efficient to make through advances in solar panel technology. The industry is developing a new thin-film panel technology that will soon replace the limited capacity produced from polysilicon panels. Panel efficiency is currently around 9%, but efficiency should reach 18% to 20% in a few more years, which will likely make solar panels the cheapest source of energy.

• Government subsidies are enticing more citizens to begin residential solar installations, writes David Fessler for Investment U.

• Retailers are also experimenting with solar panels to cut down costs by placing panels over large stores and warehouses. Wal-Mart (NYSE: WMT) is one such retailer experimenting with this, and if it goes as planned the store could become one of the largest U.S. power producers.

• China is still aiming to become one of the world’s solar leaders. First Solar Inc. (NasdaqGS: FSLR) and Ordos City agreed to build a 2-gigawatt solar installation in Inner Mongolia city, reports Patrick O’Grady for Sacramento Business Journal. The deal will start off as a 30-megawatt demonstration unit starting in June and additional phases will be online by 2014 and 2019.

Ordos officials have allotted 65 square kilometers of land for the project and they will be working in construction and financing with First Solar. The company will be operating the plant under China’s feed-in tariff, which guarantees prices paid for renewable energy.

• Market Vectors Solar Energy (NYSEArca: KWT): up 6.1% year-to-date; FSLR is 8.8%

• Claymore/MAC Global Solar Energy (NYSEArca: TAN): up 12.4% year-to-date; FSLR is 10.8%

For more information on solar power, visit our solar category.

Max Chen contributed to this article.

The cost to install solar panels as a source of energy has dropped nearly 40% over the last year, which has made them more popular among consumers.  The reason that these panels have fallen in price is twofold, states Kate Galbraith for The New York Times.

• The production of polisilicone, which is a major material used in these panels, has skyrocketed as more factories around the world are producing it and some of these factories are actually producing the panels themselves.
• Global demand for solar panels has slowed down.  In particular, demand in Europe, which is the second-largest market for solar panels, has slowed down and is expected to drop 26% compared to 2008.

These cheaper prices, in conjunction with generous federal credits and innovative ways to finance the trend toward solar panels may be beneficial for the industry in the long haul.

• Claymore/MAC Global Solar Energy Index ETF (TAN): down 7.2% year-to-date

• Market Vectors Solar Energy ETF (KWT): down 11.5% year-to-date

For more stories on solar energy, visit our solar energy category.

Kevin Grewal contributed to this article.

When it comes to alternative energy, China has strategies that the United Sates could take a few cues from. Jeff Wolfe for CleanTechnica reports that China has signed 2 gigawatts (that’s 2000 megawatts) worth of projects with Suntech. For comparison’s sake, the total U.S. market is 350 megawatts.

China has not only become the hub to find the necessary products for solar production, they are also being sought after to supply the financing for installation in the United States. The  engine for job creation in the United States may well be Chinese bank project funding.

Meanwhile, California has set the bar for solar panel installations, with around 50,000 to date, an environmental research group said. California now has the capacity of more than 500 megawatts of solar power at peak periods in the early afternoon – the same as a major power plant, reports Felicity Barringer for The New York Times.

To continue this growth, certain cities are offering incentives and financing for rooftop solar panel installation and long-term statewide rebates are cropping up to encourage the use of these panels. The growth outlook is sunny, however, as solar energy accounts for one-quarter of 1% of the state’s total energy capacity.

For more stories about solar energy, visit our solar category.

China is making a play to boost the solar energy sector, and it could draw more than $10 billion in private funding, report Leonora Walet and Rujun Shen for Reuters. Expectations that there will soon be cash incentives have solar ETFs trading higher today.

Although 27 states (and Washington, D.C.) have a renewable energy portfolio and mandates, the Federal government is still lacking one. The implementation of one has the potential to set the country on course with a specific goal. In addition, most proponents of renewable energy believe federal tax credits for renewable energy  need to be made permanent so companies have confidence concerning returns on investment in the future, reports Brian Coppa for The Examiner.

Many companies eyeing renewable energy projects are on a rush to grab public land, straining the Bureau of Land Management. The objective is to take advantage of state mandates that require utilities to obtain more power from renewable sources, along with subsidies from the Federal government, explains Stephen Power for The Wall Street Journal. It’s a balancing act that might have Obama looking for ways to keep the clean energy transition a smooth one without trampling the legacy of conservationists.

In the meantime, India has been working overtime to become a leader in solar power generation. Will they become the first hub of renewable energy to nations such as Germany, or the United States? Under the National Solar Mission, India would generate 100,000 megawatts of solar power by 2030 and 200,000 megawatts by mid-century under the plan, according to James Kantner for The New York Times.

• Market Vectors Solar Energy (KWT): up 7.8% year-to-date

• Claymore/MAC Global Solar Energy (TAN): up 13.7% year-to-date

For more stories on solar energy, visit our solar category.

Solar power may be looking at the sunny side of things as crude oil has gone past $71 per barrel, giving more cause to the case for solar energy. Claymore/MAC Global Solar Energy (TAN) is up 6.2%. Trang Ho for Yahoo reports that this is four times the usual volume, however, the 200 day-line is still trending downward.

Market Vectors Solar Energy (KWT) is up 4% on slightly higher trade as well. Some analysts warn that the shares have shot upward too intensely, and to wait until stabilization occurs. Be sure to have a trend following plan and mind the 200-day moving average when going into these ETFs.

Around $250 billion was spent for new power capacity in 2008 and for the first time, the majority of the money went toward clean energy, a report by the United Nations Environment Program has found. Renewable sources accounted for 56% of investment dollars globally, worth $140 billion, while investment in fossil fuel technologies was $110 billion

• Claymore/MAC Global Solar Energy (TAN): up 30% year-to-date

• Market Vectors Solar Energy ETF (KWT): up 22.5% year-to-date

For full disclosure, Tom Lydon’s clients own shares of TAN.

For more stories on solar energy, visit our solar category.

While the United States is increasingly making a big push to use more green energies and solar energy has a promising future here, 2009 is not going to be our year to become a leading market for solar panels, reports Ucilia Wang for Greentech Media.

Make no mistake – the United States is a promising market, but we still lag behind other countries such as Germany, Spain and Japan. Our market is also expected to shrink in 2009, while Germany’s large appetite for solar power should make up the difference. In March, China also announced a big push to step up its solar power capacity.

The tax credits and rebates put into place to help spur the industry here, but they require consumers, businesses and investors to line up their own financing, which in this climate is still tough to come by. The government is supposed to provide money to developers to finance these projects if they forgo the 30% investment tax credit, but the program hasn’t been started yet.

Spain is the number one market; Germany is number two, but could reclaim the top spot this year.

Both available solar ETFs have allocations to other countries besides the United States. In addition to that, some U.S. companies could be tapped to be a part of some overseas solar power projects.

• Market Vectors Solar Energy (KWT): up 16.9% year-to-date; Germany is 31%; China is 22%; Spain is 0.8%

• Claymore/MAC Global Solar Energy (TAN): up 23.2% year-to-date; Germany is 33%; China is 31.2%; Spain is 1.9%

Jennifer Collins for MarketPlace reports that there is another twist: imagine if the utilities had to buy any extra power you generated! As of now, any extra energy that a household generates and does not use goes back to the power company – free.

A Senate committee is reviewing the idea that utility companies could buy any extra energy from households. This way utility companies would not have to build bigger plants. States like Washington, California and Maine might require utilities to pay for excess power. Naturally, utility companies are against this notion.

Tax credits may be another good way to go. For now, another proposal is low-interest loans to encourage more people to buy alternative energy systems.

• Claymore/MAC Global Solar Energy (TAN): up 4% year-to-date

• Market Vectors Solar Energy (KWT): up 3.6% year-to-date

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