Solar Energy Monthly Report | July

Solar Energy ETF: Key Takeaways

Solar and wind exceeded 10% of global power generation for first time last year: Solar and wind reached 10.2% of overall power generation in 2021, a record, according to data from bp. Renewable generation (excluding hydro) increased by nearly 17% globally last year and made up over 50% of the increase in global power generation over the past two years. According to the bp report, China remained as the leading deployer of solar power, followed by the U.S and India. [1]

Solar PV made nearly half of new renewables investments in 2021: According to IEA, after a record year in 2021 with more than US$440 billion invested in renewables, renewables will continue to be the highest investment category in the power sector in 2022. In 2021, Solar PV comprised nearly 50% of all renewable investments, and in 2022 across all sectors and technologies world energy investment in 2022 will reach a total of US$2.4 trillion, an 8% rise from 2021 and well above pre-Covid levels. Solar investment will be equally divided between utility-scale PV projects and distributed solar systems, with both categories passing the US$100 billion mark this year. [2]

EU Set to Make Solar Panels Mandatory on All New Buildings: Solar panels may be mandatory on all new buildings in the European Union by 2029 under a new proposal aimed at rapidly replacing its reliance on Russian oil and gas supplies with renewable energy. Currently, 40% of the EU’s gas is imported from Russia at a cost of over USD$110 million a day. Following Russia’s invasion of Ukraine, the European Commission is increasing its focus on renewables, with the goal of producing nearly half of the bloc’s energy from renewables by 2030 – doubling the current amount. To achieve this, the Commission’s REPowerEU plan and the “solar rooftop initiative” is introducing a phased-in legal obligation to install solar panels on new public and commercial buildings, as well as new residential buildings by 2029. If successful, solar energy will become the largest electricity source in the EU by 2030, with more than half of the share coming from rooftops. [3]

Macro Outlook

Build Back Better 2.0 – another potential catalyst for solar and clean energy: Solar energy equities got an important boost on June 6 after President Joe Biden took actions aimed at boosting the industry and supporting domestic manufacturing in the sector, and could potentially get a further boost from a potential passage of a slimmed-down U.S. federal Build Back Better 2.0 legislative package. Clean energy would be a major component of any deal. The Senate Finance draft has a $325 billion package of incentives to encourage renewable energy production and reduce carbon emissions. Budget veterans say that, practically speaking, Democrats have until the end of July to pass a reconciliation bill. Democrats are facing a time crunch since the fiscal 2022 reconciliation instructions expire Sept. 30. After that, they'd need to adopt a new budget resolution in order to pass a filibuster-proof package. Congress will recess in August, and there are just a few weeks in September after Labor Day to pass must-pass legislation like stopgap funding to avoid a partial government shutdown. [4]

Solar Energy ETF Performance Table (As of 30.06.2022)

Please note that all performance figures are showing net data. Source: Bloomberg / HANetf. Data as of 30/06/2022

Performance before inception is based on back tested data. Back testing is the process of evaluating an investment strategy by applying it to historical data to simulate what the performance of such strategy would have been. Back tested data does not represent actual performance and should not be interpreted as an indication of actual or future performance. Past performance for the index is in USD. Past performance is not an indicator for future results and should not be the sole factor of consideration when selecting a product. Investors should read the prospectus of the Issuer (“Prospectus”) before investing and should refer to the section of the Prospectus entitled ‘Risk Factors’ for further details of risks associated with an investment in this product.

Learn more about our solar energy ETF.