The ALPS Clean Energy ETF (ACES) outperformed weaker equities markets last week as the Biden administration agreed to a two-year pause on solar panel tariffs on imports coming from Southeast Asian countries.
The move by the Biden administration should help alleviate U.S. solar supply constraints and increased pricing for U.S. solar projects, given that a majority of U.S. solar panel imports come from Asia, according to a recent insight from ALPS. Rising oil and gas prices also helped improve clean energy sentiment on the need for more renewables, as did Biden enacting the Defense Production Act last week for clean energy companies to boost domestic supply through subsidized federal grants.
Following the U.S. tariff exemption on solar imports from Southeast Asian countries, BNEF’s U.S. solar installation forecast for 2023 jumped to 27 gigawatts (GW) from 24 GW, according to ALPS. Per BloombergNEF, solar capacity additions are expected to lead all other renewable segments through 2030, adding 301 GW of clean energy capacity compared to the projected 108 GW of wind storage capacity through 2030.
The wind segment in ACES (20.80% weight as of June 10) was the top performing segment last week on single-stock news. Infrastructure and Energy Alternatives, Inc. (IEA, 0.25% weight as of June 10) popped nearly 10% last week after the company was awarded a $126 million contract by the state of Illinois to reconstruct its intrastate transportation infrastructure with renewable solutions, ALPS wrote.
Renewable power station developer Boralex Inc. (BLX CN, 3.53% weight as of June 10) also gained nearly 8% last week after winning nearly 54 megawatts (MW) of utility-scale solar projects to be built in New York, equating to enough energy to power over 140,000 homes in New York annually, according to ALPS.
ACES’ solar segment companies, Shoals Technologies Group (SHLS, 0.95% weight as of June 10) and Array Technologies Group (ARRY, 1.75% weight as of June 10), had impressive gains last week, rising 17.45% and 9.91%, respectively, on the two-year tariff pause on U.S. solar imports that is expected to add roughly 5 GW of additional U.S. solar installations by 2024, ALPS wrote.
Other ETFs available to investors that offer exposure to the clean energy industry include the First Trust NASDAQ Clean Edge Green Energy Index Fund (QCLN ), the SPDR S&P Kensho Clean Power ETF (CNRG), and the iShares Global Clean Energy ETF (ICLN ).
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