On its surface, it seems like the Inflation Reduction Act quite simply and obviously reduces inflation. However, upon reading the fine print, it does a lot for the clean energy industry, including solar power.
As such, one exchange traded fund (ETF) to consider that could benefit from the act is the Global X Solar ETF (RAYS). Government subsidies supporting the increased use of solar power could energize RAYS, making it an ideal growth option.
“After months of negotiation, the Inflation Reduction Act is now law, and the United States is on a path to becoming the world’s unequivocal leader in clean energy,” said Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association (SEIA). “Thanks to the dedicated advocacy of the Solar Energy Industries Association (SEIA), our members and partners and the steadfast leadership of our champions in Congress, a long-term framework is in place for the solar and storage industry to drive economic growth in every zip code across the country.”
“This new law will help the United States deploy enough clean energy to substantially decarbonize the electric grid and tackle climate change,” Hopper added. “It features long-term investments in clean energy and new incentives for energy storage, which give solar and storage businesses a stable policy environment and the certainty they need to deploy clean energy and meet the President’s ambitious climate goals.”
Capitalizing on Solar Growth
RAYS seeks to invest in companies positioned to benefit from the advancement of the global solar technology industry, which includes companies involved in solar power production, the integration of solar into energy systems, and the development/manufacturing of solar-powered generators, engines, batteries, and other technologies related to the utilization of solar as an energy source.
The prices of solar power materials have gone down as of late despite the rising tide of inflation. That said, more solar projects could be underway in the coming years due to the passage of the act, which can allocate more funds towards renewable energy sources like solar.
RAYS offers 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.
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