Investors well-versed in the renewable energy and clean technology concepts know that smart grid technologies aren’t just vital, but also ripe with investment potential.

Still, the smart grid concept may be too narrowly focused for many investors. An effective way of combating that is with diversified renewable energy exchange traded funds, such as the ALPS Clean Energy ETF (ACES). Efficiency, LED, and smart grid companies represent nearly 11% of the ACES lineup, good for the fourth spot among the fund’s industry exposures. While that’s not massive exposure, it’s enough for investors get into the smart grid game without significant concentration risk, and that’s a positive in the current climate.

“For investors looking for more specialized bets, one option is Itron. The company offers advanced metering infrastructure, which helps utilities better understand consumption practices through a constant flow of data. With this information, utilities can improve operational efficiency and enhance grid reliability,” reports Pippa Stevens for CNBC.

Itron, a maker of demand-response systems, accounts for 3.63% of ACES’ weight. Some analysts are bullish on the shares, saying that it’s the best pure-play smart grid company.

“Power grid modernization — a facet of both climate mitigation and adaptation — is a theme to which Itron is uniquely leveraged among U.S.-listed companies,” notes Raymond James.

Some solar names are also plays on rising smart grid adoption and spending.

“And then there are the companies that make the hardware and software to actually bring renewable energy to the grid. This is done through inverters, which are often referred to as the brains of a solar system since they convert the DC from solar modules into AC current for the grid. SolarEdge and Enphase Energy are among the companies that make these specialized inverters,” according to CNBC.

Enphase accounts for 4.63 of the ACES lineup. Enphase is higher by almost 109% over the past year, and some analysts remain enthusiastic about the stock.

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“We like ENPH’s core microinverters business, where it enjoys significant market share and is well-positioned to capitalize on growth in the U.S. resi solar market,” said KeyBanc.

Other renewable energy ETFs include the First Trust Global Wind Energy ETF (FAN) and the SPDR Kensho Clean Power ETF (CNRG).

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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. 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.