Solar ETFs Lag As U.S. Becomes Net Exporter | ETF Trends

President Obama has pledged to increase U.S. exports to boost the economy. Solar energy is apparently pulling its weight in that regard, yet solar exchange traded funds (ETFs) are putting up painful numbers.

The domestic solar power industry is helping the Obama administration to reach its goal of creating more jobs on U.S. turf. So far, it’s working: exports are up 18% over last year.

What’s interesting, though, is that the U.S. solar industry is a net exporter of solar energy products, with net exports totaling $723 million in 2009, reports Joseph Picard for International Business Times. [Are China’s Policies Hurting Green ETFs?]

Other points of interest that support solar energy use for help in the overall recovery of the U.S. economy are:

  • U.S. Solar Energy Trade Assessment 2010, a report commissioned by the Solar Energy Industries Association, or SEIA, and conducted by GTM Research, found that the solar industry created $3.6 billion in direct value to the global economy. Of that sum, $2.6 billion stayed within the United States.
  • China and Mexico are the largest importers to the U.S. solar energy industry. [Solar ETFs May Shine As Law Fails to Pass.]

If the United States is such a large exporter of solar energy, why then are solar ETFs such as Market Vectors Solar Energy (NYSEArca: KWT) and Guggenheim Global Solar Index (NYSEArca: TAN) down 28% year-to-date? The United States is no small portion of either ETF: it’s 30% of KWT and 45% of TAN.

Part of the reason simply may be that as popular as solar energy has become, it’s still a young industry backed by a lot of venture capital. It might be more beneficial to think of solar energy as a long-term growth story that’s still in its early stages.

One big benefit may soon be coming: included in the tax cut extension is an extension of the provision of cash grants for solar project development.

    Tisha Guerrero contributed to this article.

    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.