China Steps up to Lift Solar ETFs

Shares of the Guggenheim Solar ETF (TAN) are up 2.4% Tuesday, making the fund the top-performing traditional ETF on the day after China again announced initiatives seen as supportive for its domestic solar industry.

China could announce new policies as soon as this month that encourage businesses to increase installation of rooftop panels, reports Bloomberg. “Under the policies, the National Energy Administration would call for local planners to add more projects in regions where electricity can be distributed to customers living nearby, according to people familiar with the matter who asked not to be identified because they aren’t authorized to speak publicly,” according to Bloomberg.

The news sent shares of Trina Solar (TSL) up 6.7% and Canadian Solar higher by 4.7%. Yingli Green Energy (YGE) and JinkoSolar (JKS) jumped 3.8% and 6.3%, respectively. Those four stocks combine for almost 15% of TAN’s weight. [Solar ETF's Secret]

The Market Vectors Solar Energy ETF (KWT) , TAN’s smaller rival, is higher by 3.7%. TAN’s weight to Chinese stocks is almost 42.6% when including the ETF’s 14.2% weight to Hong Kong. KWT features a 32% allocation to China and a 14.6% weight to Taiwan, according to Market Vectors data.

TAN and KWT were also helped by a modest bounce in shares of First Solar (FSLR) after the second-largest U.S. solar firm by market value said it will build 45 megawatts of photovoltaic projects in India’s Telangana state, Bloomberg reported late Monday.

This promises to be a big week for solar stocks and ETFs exclusive of international installation announcements. First Solar reports earnings today after the close while Elon Musk’s SolarCity (SCTY) steps into the earnings confessional on Thursday.

SolarCity and First Solar are TAN’s largest and third-largest holdings, respectively, combining for 16.7% of the ETF’s weight. KWT allocates a combined 17% of its weight to SolarCity and First Solar. [Pre-Earnings Bounce for Solar ETF]

Guggenheim Solar ETF