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Solar ETFs Shining Brightly

Hung Tran

Solar-related ETFs’ gains edged even higher within the last five days on the heels of robust earnings reports and expansion from their underlying holdings.

The $378.9 Guggenheim Solar ETF (TAN | B-33) has surged 9.0 percent, and the $23 million Market Vectors Solar Energy ETF (KWT | C-30) gained 8.8 percent within the past five days, bringing their year-to-date gains to an impressive 165.92 percent and 120.49 percent, respectively.

1_TAN vs_KWT_YTD_Performance

Chart courtesy of StockCharts.com

Both funds are the top two ETF performers to date. In addition, TAN has netted $199.8 million year-to-date, and increase of 135 percent, while KWT has recorded no new flows, according to data compiled by IndexUniverse.

TAN and KWT both make First Solar, which makes thin-film solar panels and develops and builds large-scale solar-power plants it later sells, their top holding. The company on Oct. 31 reported third-quarter net sales of $1.3 billion, an increase of $746 million from the prior quarter and an increase of $427 million from the third quarter of 2012.

Shares of First Solar have jumped 17.11 percent in the last five days of trading.

Both funds also have exposure to SolarCity, a maker of solar panel systems, which in recent weeks has disclosed plans to build a 15-megawatt photovoltaic system for Oahu, Hawaii residents. The 50-acre project would be the largest photovoltaic system on Oahu, which has sent the company’s stock surging 7.51 percent in the past five days.

Also, SunPower Corp., a solar technology and energy service provider and another major holding for both funds, Monday announced that it has acquired Greenbotics Inc., a Davis, Calif.-based company that offers panel-cleaning products and services for large-scale solar power plants.

According to SunPower, Greenbotics cleans dust and dirt from photovoltaic and solar thermal arrays and can also decrease utilization of water by 90 percent. The company plans to use its new acquisition in dry regions such as the Middle East, the Western U.S. and Chile as a substitute for pressure washers and sprayer trucks.

Investors celebrated the announcement, sending the stock up 3.3 percent since last Friday.

“The demand for solar globally has been extremely strong,” this year, said Paul Baiocchi, vice president of analytics for IndexUniverse, in a recent podcast.


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