Among industry exchange traded funds, the Guggenheim Solar ETF (NYSEArca: TAN) and the VanEck Vectors Solar Energy ETF (NYSEArca: KWT) have been pleasant surprises this year with gains of more than 11% and 10.1%, respectively.
The U.S. could impose tariffs on solar cells, a move that could be a boon for US-based solar companies. KWT tracks a group of global companies involved in photovoltaic and solar power, or the provision of solar power equipment/technologies and material or services to solar power equipment/technologies producers. TAN also follows global companies involved in the solar industry and the entire value chain.
Solar stocks slid last year as increased competition pushed prices lower while customers pushed off on purchases in hopes of further cheaper prices, especially with Chinese companies raising production. Still, there are some positive signs.
“The United States has notified the other 163 members of the World Trade Organization that it is considering putting emergency “safeguard” tariffs on imported solar cells, according to a WTO filing published on Monday,” reports Tom Miles for Reuters. “The move raises the stakes in a global battle to dominate the solar power industry, which has grown explosively in the past five years. As production has increased, prices have tumbled, favoring producers who can take advantage of economies of scale.”