Rising energy prices of course. When oil was cheap (not but a few months ago) investing in solar went out the window. Now, as we are above $70 per barrel on oil and trending higher solar becomes a play on rising energy prices. The Claymore/Mac Global Solar Energy ETF (ticker TAN) is up over 90% (correct 90%) in the last three months, it is well above its 50 day EMA and did cross above its 200 day EMA and has since recently pulled back slightly below the 200 day. A good sign to watch for will be the 50 day EMA crossing above the 200 day EMA. This type of crossover is a lagging indicator of an uptrend.
What is in TAN
The Claymore/MAC Global Solar ETF (ticker TAN) holds 26 stocks and is heavily invested in Germany and China at over 30% of the portfolio in each country. That is followed up by 22% in the U.S. The single biggest holding is Meyer Burger Technology a Swiss-based company.
What is old is now new
Within the Solar Energy field old things are coming back. According to the Economist magazine in an article titled “The other kind of solar power” photovoltaic cells (the common solar panel) are seeing fierce competition from the old school method of generating solar power that being solar-thermal power. Solar-thermal technology concentrates sunlight to produce heat, the heat creates steam, and the steam drives a turbine. A bonus of this kind of solar power plant is that it can also be easily supplemented with natural gas as a power source in periods of low sun. After the 1970’s oil crisis research around this method picked up speed as an alternative energy but lost steam in the 1990’s when natural gas prices pulled back and America’s tax incentives for solar power were not renewed. As oil rises this old technology may make a come back.