If the steps California’s colleges are taking to incorporate solar power become the hot new trend, solar exchange traded funds (ETFs) could begin to heat up.

Gov. Arnold Schwarzenegger announced a public-private partnership to bring solar power to 15 California State University campuses, says Gale Holland for the Los Angeles Times.

Under the agreement, private company SunEdison will finance, build and install solar panels on rooftops, parking canopies and other ground-mounted displays. The firm will also operate and maintain the panels for 20 years, selling the power back to Cal State at or below market rates.

The project is expected to generate power equal to the annual energy consumption of 1,256 households. But the CSU system is no laggard in the green energy department: it already gets 20% of its power from green sources. This new project will bring it up to 25%.

With thousands of colleges throughout the United States, if this idea catches on it could be a real boon to the solar power industry.

A challenged market and falling oil prices might slow the growth of the alternative energy industry for the time being, though. Wait and see.

The Claymore/MAC Global Solar Energy (TAN) is down 64.7% since its April 15 inception.

Green Exchange Traded Funds (ETFs)

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.