Are you interested in alternative energy investing? If so, investing in solar power is always an option. Many believe that this alternative energy source has significant potential, despite solar power accounting for only a small section of the global energy market.
Similar to hydropower, solar power cannot be traded, and for this, this sector is considered to be a non-traditional commodity. With that said, the solar power sector is connected to other commodities, therefore, adopting this alternative energy source will have a tremendous impact on a variety of commodities.
There are numerous options available for those hoping to gain exposure to the solar power sector. For instance, investors could buy stocks of companies who are actively engaged in the production of solar power, or, one could invest in solar exchange-traded funds.
Investing in Solar Power
Currently, there are two ways of investing in solar power and that is through ETFs and Stocks.
Solar ETFs: What Are They?
If you think that solar power will contribute to the global energy market moving forward, there are multiple ETFs that focus exclusively on this sector. For example, solar power exchange-traded funds include the Market Vectors Solar Energy ETF (NYSEARCA:$KWT) and the Guggenheim Solar ETF (NYSEARCA:$TAN).
Both of these options include domestic and international stocks. Additionally, investors have the option to invest in component companies. Component companies are companies who produce solar power equipment and products for end-users. They are also companies who produce fabrication products. Fabrication products are the equipment used by solar cell and module producers. Furthermore, a component company can supply advisory services to solar power equipment producers or those that supply material to these producers.
Buying Solar Stocks
As mentioned, investing directly in solar power is not feasible. But, an individual that is interested in this sector of alternative energy investing could purchase stocks of a company whose main focus is on solar power.
These companies could include producers of solar panels or firms that focus on the manufacturing of solar cells. Though the majority of solar power companies are international, there are a few companies that are listed on U.S exchanges and are headquartered domestically. These solar power stocks include the following:
- First Solar ($FSLR)
- Yingli Green Energy ($YGE)
- Renewable Energy Corp ($REC)
- Trina Solar Limited ($TSL)
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