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.”
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 clean energy sector 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.
“Last September, the WTO ruled that India was illegally discriminating against U.S. solar exports, while India launched its own WTO complaint about solar subsidies in eight U.S. states,” reports Reuters. “The United States’ ability to attract renewable energy investment has been tarnished by the shift in energy policy under U.S. President Donald Trump, putting China and India on top, a report by British accountancy firm Ernst & Young said earlier this month.”
The Trump Administration has shown some support for alternative energy stocks. Earlier this year, alternative energy stocks and exchange traded funds were boosted after it was reported that the White House is exploring a carbon tax to bolster revenue.
For more information on the photovoltaic panel industry, visit our solar category.