The Guggenheim Solar ETF (NYSEArca: TAN), which tracks global solar photovoltaic panel producers, has been drubbed this year and recent price action in the largest solar exchange traded fund shows traders continue to hammer the fund.
Last week, TAN fell 3.3%, bringing its one-month loss to nearly 9%. Year-to-date, TAN has plunged more than 43%.
Clean energy stocks and ETFs have wilted following Donald Trump’s surprise victory in last month’s presidential election.
The clean energy sector has found support under President Barack Obama as the administration pledged to fight against global warming and climate change through heavy subsidies into green technology. However, Trump, who called climate change a hoax perpetrated by China, pledged to cancel last year’s Paris climate agreement and remove Obama’s Clean Power Plan, could reverse years of supportive alternative energy policies.
Trump could issue and rescind executive orders aimed at supporting the nascent clean energy industry. The President elect has stated that he would dissolve much or all of the Environmental Protection Agency. Meanwhile, Republicans in Congress have already supported groups suing to overturn Obama’s Clean Power Plan. The new administration may also pass on funding for research and technology aimed at bringing operations in line with Paris climate goals.
Government subsidies helped green energy technology get its foot in the door, but lower costs will help the industry compete with fossil fuel. Economies of scale has been the top driver of falling prices – for example, the cost of solar power has plunged to 1/150th of its level since the 1970s and solar installation has surged 115,000-fold.
SEE MORE: Clean Energy ETFs Could Rally
Still, there are positive signs for solar stocks and investors willing to consider the group on a long-term basis.
“Solar power is being particularly adopted by mass big box retailers – Walmart and Target for instance are the largest two users of solar according to the SEIA with 147.5 MW and 145 MW respectively. That makes sense as the large flat roofs of big box stores present an obvious opportunity for solar, and the firm’s low cost of capital thanks to a stable business model means that installing solar should be profitable at most reasonable price points,” according to OilPrice.com.