Solar and Wind Power Heating Up and Gusting

With lowered costs and tax incentives available through the Inflation Reduction Act, solar power and wind energy are on track for meteoric growth within the U.S. As a share of new electric-generating capacity each year, solar and wind power is seeing substantial growth, according to the U.S. Energy Information Administration. In 2023, these technologies account for the majority of the new, utility-scale generating capacity that developers plan to bring online in the U.S.

The capacity for solar energy in the U.S. has soared, thanks to the lowered cost of solar panels and tax incentives through the IRA. More than half of the new U.S. generating capacity expected to be solar power in 2023. And like solar power, the capacity for wind power has surged, due to lower turbine construction costs, tax incentives, and new renewable energy targets.

“While there is still a long road ahead for clean energy adoption, regulations and social changes are driving investment in clean energy companies and creating growth opportunities for the sector,” said Roxanna Islam, VettaFi’s associate director of research.

Investors looking to fuel the growth of clean energy, Invesco’s clean energy ETFs, which include the Invesco WilderHill Clean Energy ETF (PBW) and the Invesco Solar ETF (TAN), may be worth looking into.

PBW normally invests at least 90% of its total assets in the WilderHill Clean Energy Index, which is composed of publicly traded stocks of companies engaged in the business of advancement of cleaner energy and conservation. PBW had 74 holdings as of Dec. 31. Top holdings as of March 7 include Wallbox NV, Archer Aviation, and TPI Composites. PBW carries an expense ratio of 0.62%.

TAN, meanwhile, invests at least 90% of its total assets in the securities that comprise the MAC Global Solar Energy Index, which is comprised of companies in the solar energy industry. The fund had 44 holdings as of Dec. 31. Top holdings for TAN as of March 7 were First Solar (whose stock has been soaring), SolarEdge Technologies, and Enphase Energy. TAN has an expense ratio of 0.69%.

For more news, information, and analysis, visit the Innovative ETFs Channel.