Do solar stocks have a bright future?

Beaten down with the fall in oil prices, solar power has experienced fits and starts since bottoming out with the stock market. Now consider that oil prices are rising and and the cost of solar technology is dropping. According to o a recent report from Lawrence Berkeley National Lab, the average U.S. installed costs of a solar photovoltaic (PV) system — which includes solar panels, inverters, labor and more — declined to $7.50 per watt in 2008 from $10.80 per watt in 1998, a 30 percent drop over a 10-year period. And, prices are still declining all the while capital markets are thawing and warming up to solar.

Getting Warmer

Today, Vishal Shah, an analyst with Barclays upgraded SunPower, Suntech Power and JA Solar from “equal-weight” to “over-wieght.” Demand next year is forecasted to reach 9,300 megawatts globally, up from an earlier forecast of 7,300 megawatts.  This uptick is a result of  Europe, China and the U.S. increasing orders for solar panels. “We expect strong demand to continue into the first half of 2010 and expect companies to report improving demand trends in the near term,” Shah said today in a note to clients.  Shah’s comments sent solar stocks running upward.

ETF Plays on Solar Energy

There are two ETFs that focus on solar energy the Claymore MAC Global Solar Energy ETF (ticker TAN) and the Market Vectors Solar Energy ETF (ticker KWT).

Market Vectors Solar Energy (KWT) has approximately $31 million in assets which is below the minimum of $50 million we typically look for in a fund.  The fund is up 10.34% for the last three months and is very close to moving above its 200 day EMA.

Claymore MAC Global Solar Energy (TAN) has approximately $179 million in assets and is approaching its 200 day EMA.  The fund is up 12.85% for the last thee months.  This fund has slightly more invested overseas but holdings are very similar across the two funds.

Charts courtesy of StockCharts.com

Disclosure Statement: ETFGPS is a blog that Navigates The World of ETFs. Sustainable Investment Strategies LLC is a Registered Investment Adviser in the State of Maryland, and does not hold positions in any ETFs or stocks mentioned at the time of writing. Investors who are interested in money management services may visit the Sustainable Investment Strategies LLC web site

Tagged as: Green Investing, Socially Responsible Investing, Solar