As China continues to work towards reducing its carbon footprint, solar energy will play a vital role in helping achieve that goal.
While the pandemic is causing supply chain disruptions around the globe, the second-largest economy is working around that obstacle. One way is to add a touch of innovation when it comes to solar energy panels.
“The supply chain snarl that tripled the price of a key raw material for solar panels is about to get fixed, clearing the way for a renewed boom in the use of the clean energy technology,” Bloomberg reports.
“China is spending billions on new factories to produce polysilicon, used to make photovoltaic cells for solar panels,” Bloomberg adds. “Global capacity has already been boosted by more than a quarter in the past two months, and it will double by early next year. That should help rein in prices of the material after surging costs slowed the pace of new renewables projects.”
A Solar ETF With Heavy China Exposure
One way to play the upside in China’s solar energy push is the Global X Solar ETF (RAYS), which is comprised of China exposure pegged at 50%. The fund seeks to invest in companies positioned to benefit from the advancement of the global solar technology industry, which includes companies involved in solar power production, the integration of solar into energy systems, and the development/manufacturing of solar-powered generators, engines, batteries, and other technologies related to the utilization of solar as an energy source.
RAYS made its debut in September 2021, and it couldn’t have come at a better time. With a trillion-dollar infrastructure plan in play in Congress, money could be flowing into more renewable energy projects, which would include more solar power usage.
Relatively speaking, the prices of solar power materials have gone down as of late despite the rising tide of inflation. That said, more solar projects could be underway in the coming years, especially now that the U.S. infrastructure plan is allocating more funds towards renewable energy sources like solar.
RAYS offers investors:
- High growth potential: Forecasts suggest that the global market for solar energy could reach $200 billion by 2026, quadruple the market size in 2019.
- Advancing clean technologies: Solar is the most abundant energy resource on earth. Increased adoption of solar technologies could potentially help address global power insecurity and minimize the adverse environmental impacts of fossil fuel consumption.
- Conscious approach: RAYS incorporates environmental, social, and governance (ESG) screens and follows ESG proxy voting guidelines to affect positive change alongside financial returns.
For more news, information, and strategy, visit the Thematic Investing Channel.