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Solar ETF Shines on Installation Estimates with SolarCity Surging 22%


The rapid growth in the photovoltaic industry has put solar exchange traded funds in the limelight. The momentum does not appear to be slowing down, with Elon Musk’s SolarCity (SCTY) projecting installations to expand 90%.

SolarCity stocks jumped over 22% Friday after announcing annual installed capacity could increase to 575 megawatts to 525 megawatts in 2014, up from the estimated 278 megawatts this year, Bloomberg reports. [Solar ETF is Almost Unstoppable]

The company installed 78 megawatts in the third quarter, exceeding estimates of 70 to 77 megawatts.

Fueling the demand, residential areas are installing rooftop solar panels at little to no upfront cost. For instance, in California, the largest solar market, 68% of new residential projects were installed through these plans over the second quarter, up 48% over the past two years.

“Leasing is the reason why we expect the high growth within the U.S. solar market to come more so from the residential side than the large scale projects you have seen in the recent years,” S&P Capital IQ analyst Angelo Zino, said in a Reuters article.

The Guggenheim Solar ETF (TAN) was up 2.2% Friday. The fund has gained 133% year-to-date. TAN has a 4.3% allocation toward SCTY, but the rival Market Vectors Solar Energy ETF (KWT) does not have SolarCity exposure. [The Solar ETF Has A Bright Future]

For more information on the photovoltaic industry, visit our solar category.

Max Chen contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.