According to a Reuters article, China is looking to add 75 to 90 gigawatts (GW) of solar power in 2022, opening up the investment field for renewable energy plays in solar energy.
“Distributed solar power accounted for over 50% of total newly installed solar capacity for the first time in 2021. Looking ahead, we will see distributed solar power and centralised solar farms grow at the same pace,” said Wang Bohua, honorary chairman of the China Photovoltaic Industry Association (CPIA).
Due to its focus on solar energy growth, investors will want to look at the Global X Solar ETF (RAYS) as a potential play. RAYS seeks to invest in companies positioned to benefit from the advancement of the global solar technology industry.
RAYS gives investors:
- High growth potential: Forecasts suggest that the global market for solar energy could reach $200 billion by 2026, quadruple the market size in 2019.
- Advancing clean technologies: Solar is the most abundant energy resource on earth. Increased adoption of solar technologies could potentially help address global power insecurity and minimize the adverse environmental impacts of fossil fuel consumption.
- Conscious approach: RAYS incorporates environmental, social, and governance (ESG) screens and follows ESG proxy voting guidelines to affect positive change alongside financial returns.
A More Broad Renewable Energy Play
China has been looking to clean up its act on a broader scale when it comes to reducing its carbon footprint aside from solar energy specifically. As such, a more broad play on renewable energy could be of interest to investors, making the Global X Renewable Energy Producers ETF (RNRG) a choice to consider.
RNRG seeks to track the price and yield performance of the Indxx YieldCo & Renewable Energy Income Index. The underlying index is designed to provide exposure to publicly traded companies that produce energy from renewable sources, including wind, solar, hydroelectric, geothermal, and biofuels (including publicly traded companies that are formed to own operating assets that produce defined cash flows).
Overall, RNRG gives investors:
- High growth potential: RNRG enables investors to access high growth potential through companies at the leading edge of a structural shift in global energy production.
- Renewables exposure: The ETF is a targeted, thematic play on renewable energy producers.
- A conscious approach: RNRG incorporates the environmental, social, and governance (ESG) proxy voting guidelines from Glass Lewis.
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