Solar Energy Monthly Report | July
In June 2021, we launched Europe's first Solar Energy ETF. Learn more about the fund here.
The Solar Industry has spent the last two decades slashing the cost of generating electricity using the sun, but now it is focusing on advances in technology to make the panels more powerful and efficient. (Bloomberg)
Solar power was already “dirt cheap”, but now it is about to get more powerful.
Some of the technological methods being used to “supercharge” panels are:
- Perovskite, a thinner and more transparent polysilicon,
- Bi-facial Panels, that make use of the small amount of light that reflects back off the ground,
- Doped Polysilicon, where N-type material is made by doping polysilicon with a small amount of an element with an extra electron like phosphorous.
- Bigger Wafers, Better Cells, as producers are now pushing 182- and 210-millimeter wafers, and the larger sizes will grow from about 19% of the market share this year to more than half by 2023, according to Wood Mackenzie’s Sun. Factories that wire wafers into cells are also creating new designs that increase power generation.
The underlying index of our Solar Energy ETF, the EQM Global Solar Energy Index, has delivered a positive
return of 15.78% since inception as solar energy stages a clean energy
resurgence. Spanish solar plant development firm Solarpack was the top
index performer (+43%) after receiving a $1 billion bid from Swedish fund
EQT. Other top performance holdings were
Chinese solar product manufacturer JinkoSolar and Hong Kong listed photovoltaic
glass producer Flat Glass Group.
JinkoSolar announced the application for an IPO of one its subsidiaries,
providing a new funding source for the company.
Flat Glass’s returns are associated with robust product demand.
Global Solar Energy Index Performance
Past performance is no guarantee
of future performance.
Index, in USD. 12 Month figures from 09.06.2021
inception to 30.06.2021
The bottom index performer in June was Chinese high-purity
polysilicon manufacturer Daqo New Energy, down more than 5%, but
investors are generally positive regarding the company’s plans to issue
additional shares on the Shanghai Exchange on July 19th. But a unit of the company was recently
blacklisted in the U.S. on forced labour concerns.
Solar Energy Performance Table (As of 30.06.2021)
EQM Global Solar Energy Index
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. Source: Bloomberg / HANetf. Data as of 30/06/2021.
The recent rise in solar component prices took a breather,
providing some relief to an industry that had been experiencing rising cost
pressures. According to BloombergNEF, the key solar raw material, polysilicon,
is at $28.2/kg, below the $28.6 in early June. Mono wafers, the next step in
the supply chain, fell 7% and solar cells -2%.
US Solar installations soared by 46% in the first quarter
and are on track for record-breaking growth over the next three years according
to a report by energy research firm Wood Mackenzie and the industry trade group
Solar Energy Industries Association. The report reflects both robust demand
from utilities and corporations seeking to meet greenhouse gas reduction goals
and declining costs for the technology that has made it competitive with power
generated from fossil fuels.
In a draft law, Germany is seen to be up solar energy
expansion by 2030 as part of its climate protection program. The new plan aims
to expand installed production capacity of solar energy to 150 GW from 100 GW,
the draft showed. Germany's installed capacity of solar energy at 52 GW in
May was a major month for the cleantech and energy world.
First, a Dutch court ruled that oil giant Royal Dutch Shell must cut carbon
emissions by 45% by 2030. Secondly, activists won three of twelve Board seats
at ExxonMobil in a push for climate strategy change.
U.S. Democratic Sen. Jon Ossoff of Georgia introduced
legislation that would give tax credits to manufacturers throughout the solar
energy supply chain. The idea of giving incentives to onshore solar
manufacturing has gotten more support in Washington than some observers may
The Biden administration ordered a ban on U.S. imports of a
key solar panel material from Chinese-based Hoshine Silicon Industry Co over
forced labour allegations. The U.S. Commerce Department separately restricted
exports to Hoshine, three other Chinese companies and the paramilitary Xinjiang
Production and Construction Corps (XPCC), saying they were involved with the
forced labour of Uyghurs and other Muslim minority groups in Xinjiang. Reacting
to these actions, China's foreign ministry spokesman Zhao Lijian said China
will take "all necessary measures" to protect its companies' rights
and interests. Beijing has dismissed accusations of genocide and forced labour
in Xinjiang as lies.
The three other companies added to the U.S. economic
blacklist include Xinjiang Daqo New Energy Co, a unit of Daqo New Energy Corp
(DQ.N); Xinjiang East Hope Nonferrous Metals Co, a subsidiary of Shanghai-based
manufacturing giant East Hope Group; and Xinjiang GCL New Energy Material Co,
part of GCL New Energy Holdings Ltd (0451.HK).
Swedish private equity fund EQT, the biggest publicly
traded private equity firm in Europe, launched an offer for the Spanish solar
developer, Solarpack with a 45% premium over its closing price.
Jinko Solar (JKS) shares rose 23% the day following
news that it will IPO a subsidiary on Shanghai's Sic-Tech innovation board
(STAR market). Canadian Solar (CSIQ) also rose 13% on news that it, too,
will separately IPO a subsidiary on China's STAR market.
The stock price of Daqo New Energy Corp (NYSE: DQ) rallied
on news that Daqo New Energy – a leading manufacturer of high-purity
polysilicon for the global solar PV industry – is in the process of applying
for an initial public offering (IPO) of the company’s major operational
subsidiary Xinjiang Daqo New Energy on the Shanghai Stock Exchange’s Sci-Tech
Solar energy stocks rose, after Stephens’ analyst Gail Nicholson
published a positive commentary on the industry. She sees the recent decline of
solar stocks presenting a nice buying opportunity. The commitment that
companies and government have for solar energy will boost demand for it, she
said, according to Bloomberg. (The Street)
- Solar Stocks on Sale: Trading down with
other clean energy sectors, the recent decline in solar stocks represents a
- M&A and IPO’s Fueling Interest in Solar
Names: The offer for Solarpack and recent solar industry IPO’s have
generated interest in the space as industry consolidation continues and value
- Allegations in Xinjiang Favor U.S. Producers:
The ban on U.S. imports from several
solar manufacturers in Xinjiang on forced labour concerns and proposed
legislation subsidizing U.S. manufacturers could provide a boon to U.S. solar
manufactures relative to Chinese producers.
To learn more about our Solar Energy ETF and the solar energy industry, please visit the fund page.