Despite the drop-off in oil prices, governments and research facilities are clamoring to make solar energy a viable source of power. The progress is promising, and if solar manufacturing and applications continue to develop, you can bet that related exchange-traded funds (ETFs) will benefit as well.

A stifling heat wave last week in much of the country underscored the need for a new source of energy. Utility companies were feeling the pinch as consumers and businesses cranked up the air conditioning. David Fessler of Investment U reports that Consolidated Edison saw a record 13,141 megawatts of continuous demand.

An unfortunate twist to this heat wave was that we have the technology to flip the problem into the solution, but have not implemented the policy to do so. Currently, New York is offering residents $1.75 per watt up to a maximum of 5 kW per solar site. For commercial customers, the maximum is 50 kW. But considering the cost to setup a solar system, the savings do not go a long way.

Fortunately, there are examples of viable models within the states and in different countries. For example, in Oregon, Germany and Spain, solar credits are awarded based on the rate of electrical power generated, not on the cost of the system itself.

In Oregon, the first phase of their solar credit program sold out in just 15 minutes. [Green ETFs Get a Boost From Washington.]

In addition to implementing incentive policies, economies of scale are also helping to make solar a viable alternative energy. Dan of CalFinder reports that the Chinese government agreed to loan Yingli Green Energy Holdings $5.3 billion to expand its solar manufacturing process. This comes on the heels of a $4.4 billion loan to Trina Solar.