China demand expectations have improved over the past few months – most solar companies expect China demand to approach 8-9GW this year (vs prior est of 5-6GW) mainly due to a rush of solar installations in Western China where incentives are set to decline from RMB 1.0/kWh to 90c/kWh,” said Deutsche Bank according to Barron’s.

Deutsche’s top picks in the solar sector are Trina Solar (NYSE: TSL) and Yingli Green Energy (NYSE: YGE), a combined 9.3% of TAN’s weight. The stocks combine for just over 9% of KWT.

In numbers, this is why China is so important to solar ETFs: China and Hong Kong combine for almost 40% of TAN’s country weight while China and Taiwan combine for 45% of KWT’s weight.

Market Vectors Solar Energy ETF