Solar Energy Monthly Report | September

Solar ETF: Key Takeaways

An international group of researchers from 15 universities has said that there is growing consensus among scientists that an energy system based on 100% renewables could be achieved cost effectively by 2050: A group of energy researchers, led by Christian Breyer of Finland’s Lappeenranta University, has conducted an extensive review of this literature, going back to Bent Sorenson’s 1975 paper “Energy and Resources,” published in Science. The group notes that since 2010, the number of published studies showing that 100% renewable energy can be achieved by 2050 has grown by 27% each year. The review paper, “On the History and Future of 100% Renewable Energy Systems Research,” was recently published in IEEE Access. The paper shows that most of the literature on 100% renewables favors solar and wind as the primary generation sources. [1]

India formally committed to pivot half its electricity generation capacity to use clean fuels by 2030 and reiterated a demand for its “due share” of financial assistance as one of the world’s top emitters seeks to go carbon-neutral by 2070. According to a statement made by the Indian government, Prime Minister Modi’s cabinet Wednesday approved plans to cut emissions intensity of its GDP to 45% by 2030 compared to 2005 levels. India, the world’s third-biggest polluter, stood out among top emitters when Modi announced a plan to achieve net zero by 2070 at the COP26 summit in Glasgow late last year. The country has followed up with series of policy measures since, including production-linked incentives for manufacturers of electric vehicles and batteries, amendments to energy use laws and introducing a national hydrogen plan.

Princeton study expects U.S. solar deployment to increase fivefold under Inflation Reduction Act: US utility-scale solar may deploy at five times the 2020 rate of 10 GW, reaching 49 GW annually by 2024, said Princeton in an analysis of the potential impact of the Inflation Reduction Act. The bill contains $370 billion in spending for renewable energy and climate measures and calls for a 40% reduction in carbon emissions by 2030. [3]

Global solar capacity to grow 30% this year: Bloomberg senior clean energy analyst Rob Barnett forecasts a 30% increase in global PV deployment this year, and double-digit growth through 2025. According to Barnett, global PV installation may reach 250 gigawatts this year. China is contributing the largest share to capacity growth this year, with about 108 GW of PV estimated to reach operations. This is a near-doubling of the roughly 55 GW installed by China last year. China has the world’s largest exposure to renewable energy, with 323 GW of solar and 338 GW of wind energy. President Xi Jinping aims for 1,200 GW combined by 2030, and the nation is currently ahead of schedule on that goal. [4]

Please remember that all performance figures are showing net data. Past performance is not indicative of future performance, and when you invest in ETFs your capital is at risk.

Macro Outlook

The Inflation Reduction Act, signed into law by President Joe Biden on August 16, was a major positive signpost for solar energy equipment suppliers and provides over $370 billion in direct support for renewables, electric vehicles, and other low-carbon technologies, mainly through tax credits. Companies such as First Solar, Enphase, SolarEdge, SunPower and their peers could see much more rapid demand growth in the next five to ten years based on new incentives, including an extension of the investment tax credit (ITC) for solar energy and the inclusion of domestic manufacturing incentives. [5]

The new bill represents unprecedented US commitment on climate. It offers nearly four times as much funding for clean energy as the 2009 Recovery Act.[6] Since equipment costs for climate solutions have fallen rapidly since then, the impact of this new bill should be more than four times greater. [7]

According to Bloomberg BNEF, 2022 is expected to be another year of record solar build, despite high material prices. BNEF has increased its forecast for its 3Q 2022 Global PV Market Outlook by 5% to 251 gigawatts from its previous estimate of 238 gigawatts. [8]

Solar ETF Performance Table (As of 31.08.2022)

Please note that all performance figures are showing net data. Source: Bloomberg / HANetf. Data as of 31/08/2022

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.

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