President Obama’s budget proposal includes a 12% bump for the Energy Department and it could translate into even more of a kick for solar energy exchange traded funds (ETFs).
Murray Coleman for Barron’s reports that the plan would include $457 million for solar energy research and development, among other things.
It’s only the latest spate of good news for the sector, which several analysts projected would outperform this year for a few reasons:
- Oil prices are moving higher again. Interest in green energy technologies often moves inversely to the price of oil and other fossil fuels.
- President Obama recently stated his goal to have 80% of power coming from clean energy sources by 2035, which could spark a push for more legislation.
- It’s been a good year for solar so far: in the last month, solar ETFs have gained about 12%.
Among the sector’s major players generating decent returns and interest from investors and analysts alike include both Chinese and U.S. solar companies: First Solar (NYSE: FSLR), Yingli Green Energy (NYSE:YGE) and Sunpower (NYSE: SPWRA), Jinko Solar (NYSE: JKS) and Canadian Solar (NYSE: CSIQ) Trina Solar (NYSE: TSL) and Suntech Power (NYSE: STP), says Eric Rosenbaum for The Street.
- Guggenheim Solar (NYSEArca: TAN) is the ETF industry’s first and largest solar ETF and it owns many of the industry’s top companies, including: First Solar, 21.1%; Trina Solar, 6.8%; Suntech Power, 4.2%; Yingli Green Energy, 4.2%; and Jinko Solar, 1.2%.
- Market Vectors Solar Energy (NYSEArca: KWT) has many of the same holdings as TAN, but in smaller allocations. First Solar, for example, is 10.6% of the fund. Others include Trina Solar, 9.2%; Yingli Green Energy, 4.5%; Suntech Power, 4.3%; and Canadian Solar, 2%.
Disclosure: Tom Lydon’s clients own TAN. Tisha Guerrero contributed to this article.
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