The Best Solar ETF (the Only One) for a Narrow Energy Play

Solar power is currently emerging as a popular alternative energy source. Here we'll look at the best – and only – solar ETF on the market.

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Introduction – Why Solar?

As fossil fuels diminish and the concern over climate change grows, solar energy has emerged as a viable, sustainable alternative energy source. Solar stocks have outperformed the broad market recently as both commercial and residential demand for solar energy soars.

Over the past decade, the costs of solar energy production have decreased significantly, meaning increased consumer demand and more profitability for solar companies. Massive wide-scale production of solar panels in China has also driven down prices for solar panel installation. Tax subsidies are an added benefit for early adopters of the alternative energy source.

Below we'll look at the best – and only – solar ETF on the market for a narrow play on clean energy.

The Best Solar ETF – TAN from Invesco

The Invesco Solar ETF (TAN) is the only solar-focused ETF on the market. The fund seeks to track the MAC Global Solar Energy Index, comprised of solar companies of multiple cap sizes around the world, weighted heavily in the U.S. and China. This solar ETF is very popular, with over $1 billion in assets. TAN offers broad exposure to all aspects of the solar industry, including producers, installers, manufacturers, and suppliers of solar panels and components. This ETF has an expense ratio of 0.71%.

Where To Buy This Solar ETF

TAN is available at M1 Finance. The online broker makes it easy to add this ETF at a specific allocation inside one's investment portfolio. M1 has zero trade commissions and zero account fees, and offers fractional shares, dynamic rebalancing, intuitive pie visualization, and a sleek, user-friendly interface and mobile app. I wrote a comprehensive review of M1 Finance here.

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Disclaimer:  While I love diving into investing-related data and playing around with backtests, this is not financial advice, investing advice, or tax advice. The information on this website is for informational, educational, and entertainment purposes only. Investment products discussed (ETFs, mutual funds, etc.) are for illustrative purposes only. It is not a recommendation to buy, sell, or otherwise transact in any of the products mentioned. I always attempt to ensure the accuracy of information presented but that accuracy cannot be guaranteed. Do your own due diligence. All investing involves risk, including the risk of losing the money you invest. Past performance does not guarantee future results. Opinions are my own and do not represent those of other parties mentioned. Read my lengthier disclaimer here.