Solar Energy Monthly Report | October

Solar ETF: Key Takeaways

Solar accounted for half of all global power generating capacity additions in 2021: Solar accounted for half of all global power generating capacity added last year, with 182GW deployed, a 25% increase on 2020, according to a report from research organization BloombergNEF (BNEF). In almost half of the countries tracked by BNEF, solar was the number one choice in terms of volume, including the biggest markets such as China, the US, India, Australia and Brazil. [1]

Solar in the U.S. is forecast to triple in five years: According to the Solar Energy Industries Association (SEIA) and Wood Mackenzie in the U.S. Solar Market Insight Q3 2022, installed and operational solar capacity may increase 300% in five years, skyrocketing from 129 GW today to 335 GW by 2027. This is 40% above previous forecasts. This rapid growth expectation is being driven by the Inflation Reduction Act (IRA), which has given the solar industry the most long-term certainty it has ever had according to Wood Mackenzie. [2]

Asia’s largest economies expected to see ‘exponential growth’ in solar capacity through 2030, average annual growth of 22%: According to new analysis from think tank Ember, Five of Asia’s biggest economies will exponentially grow their solar capacity in the coming years. The Philippines, Indonesia, India, China and Japan will see an average growth of 22% each year this decade, with the fastest growth rates in Indonesia and the Philippines. [3]

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. [4]

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.[5] Since equipment costs for climate solutions have fallen rapidly since then, the impact of this new bill should be more than four times greater. [6]

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. [7]

Solar ETF Performance Table (As of 30.09.2022)

Please note that all performance figures are showing net data. Source: Bloomberg / HANetf. Data as of 30/09/2022

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 ETF.