Solar and wind exchange traded fund investors should look to the long-term as record investments in clean technology could help fuel growth. While the plunge in oil prices have dragged down the renewable energy, investors may find a cheaper entry point into a growing sector.
Year-to-date, the Guggenheim Solar ETF (NYSEArca: TAN) and the Market Vectors Solar Energy ETF (NYSEArca: KWT), which track global solar photovoltaic panel producers, plunged 28.2% and 23.4%, respectively. Meanwhile, the First Trust Global Wind Energy Fund (NYSEArca: FAN), which follows companies involved with the wind energy industry, was up 0.8% so far this year.
While the market for these green energy sectors may be under pressure, clean energy investments broke new records in 2015 and is attracting twice as much global fund as fossil fuels, reports Tom Randall for Bloomberg.
Fueling the growth in renewables, alternative energy technologies are becoming cheaper. Michael Liebreich, chairman of the advisory board for Bloomberg New Energy Finance, pointed out that recent solar and wind auctions in Mexico and Morocco ended with companies that promised to produce electricity at the cheapest amount from any source anywhere in the world.
“We’re in a low-cost-of-oil environment for the foreseeable future,” Liebreich said at the BNEF Summit. “Did that stop renewable energy investment? Not at all.”
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