As a proxy for the solar energy industry, the Invesco Solar ETF (NYSE: TAN) is a good illustration of how the pandemic clean energy boom became a bust.
The shares peaked at US $121 in 2021 at the height of the pandemic, but cutthroat competition, over capacity, stubbornly high interest rates and an intensifying trade war with China since have all played their part in dragging the sector down. At the current price of US $41.68, it is two-thirds lower than the peak.
Here’s an update:
Background: The Invesco Solar ETF follows the MAC Global Solar Energy Index. It has 100% of its holdings in solar manufacturing and related equipment, including the technology to operate power plants, store energy, and build related equipment.
Performance: The fund has is down 23% year-to-date.
Key metrics: This ETF has an MER of 0.69% and $982 million in assets.
Portfolio: Three-quarters of the fund’s assets are in the US (58%), China (14%), and Israel (5%). The lone Canadian holding is Canadian Solar Inc.
The top holdings are Arizona-based First Solar Inc., (16%), which makes panels and builds solar power plants. Enphase Energy Inc. (9%) makes solar power management software, and NEXTracker Inc. (9%) makes software and utility-grade power management systems.
Distribution: The fund suspended annual distributions in 2021 and 2022 but resumed them in December 2023 with a modest payout of $.048 per share. The units yield 0.12% at current prices.
If you think clean energy has a future, this ETF is broadly diversified, and its North American weighting offers some stability. Its holdings include higher margin producers of battery storage and inverters, the brains of these systems.
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Adam Mayers 
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