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A place in the sun: The investment case for solar energy

October 2021

Categories: DIY Magazine











By Jane Edmondson, Co-founder of the Solar Energy UCITS ETF


Though the move towards renewable energy, and in particular Solar Energy, may feel like a recent trend, the advent of our working relationship with the Sun goes back several millennia.

Records dating as far back as 7th century B.C. detail humans using the sunlight to light fire with magnifying glass materials and though we have not looked back since, it is only now that Solar looks set to truly catch fire.

As the renewable energy revolution enters an important inflection point this decade, the case for solar energy investing is more compelling than ever amid two potential catalysts: the commitment from many countries to promote a clean-energy future and the significant decline in renewable energy costs. Together, these factors may lead to increased adoption of solar and other clean energy sources.

On the policy side, governments of more than 100 countries have pledged to achieve net-zero carbon emissions by 2050 due to climate-change mitigation and economic considerations.[i] Affordable and clean energy technologies will have meaningful benefits for the world over the long term, according to the International Energy Agency (IEA).

These benefits include improved energy security among countries through reliance on an indigenous, inexhaustible, and mostly import-independent resource, enhanced sustainability, reduced pollution, as well as lower costs of alleviating global warming and keeping fossil fuel prices lower.[ii]

As countries pivot towards clean energy in a bid to meet their net-zero carbon emission goals, over $15 trillion is expected to be invested globally in new power capacity (an average of $486 billion per year) between 2020-2050. Solar is expected to account for 28% of all renewable energy investment globally, suggesting that over $4 trillion ($135 billion per year on average) will be invested in the energy source.

Many countries are expected to prioritise converting or substituting dirty-energy powered utilities for clean-energy alternatives. For example, U.S. President Joe Biden has set a goal of zero emissions from electric utilities by 2035 and a broader goal of net-zero greenhouse gas emissions by 2050.

Approximately 50% of all U.S. carbon emissions come from utilities [see chart below], while the rest come from sectors like transportation and industries where technologies may be slower to evolve from dirty energy to clean energy (i.e., airlines still need to fly on jet fuel, not electric vehicle technology).

Global Electricity and Heat Producers: Largest Contributors to Carbon Emissions


Sources: IEA and Morgan Stanley Research, November 2020; Based on IEA data collected from countries.

The illustration shows electricity and heat producers account for 51% of carbon emissions globally, while industries account for 28% of total emissions, transportation’s share is 10%, residential’s share is at 4%, other energy industries at 3%, commercial and public services at 2% and others at 2%.

On the cost side, it is important to note that conventional energy from fossil fuels (i.e., coal, oil and natural gas) has dominated the global power supply because until recently, electricity from fossil fuels, especially coal, was far cheaper than electricity from renewables (i.e., solar, wind, rain and geothermal heat). This has dramatically changed within the last decade. In most places across the globe, power from new renewable energy sources is now cheaper than power from new fossil fuels.[iii]

In fact, solar energy is now the cheapest new source of global electricity in most developed countries. With solar less expensive today than fossil fuels, this may serve as a key driver of rapid wide-scale adoption.[iv]

In the United States, there has been an ongoing trend away from conventional toward renewable energy. The U.S. Energy Information Administration (EIA) forecasts that the share of renewables in the U.S. electricity generation mix will increase from 21% in 2020 to 42% in 2050. Wind and solar are responsible for most of that growth. The renewable share is projected to increase as nuclear and coal-fired generation decrease and the natural gas-fired energy generation share remains relatively constant.[v]

From a bottom-up perspective, growing global demand for sustainable green energy solutions has created investment opportunities for companies throughout the solar energy supply chain, meaning that-the transition to clean energy is seen as net-jobs positive.

At this point, the investment case for Solar Energy, like with many ESG related themes, has moved beyond pure altruism.

Its innovation born out of necessity, with a powerful blend of socio-economic need backed by a shift in global government policy ushering Solar into the mainstream consciousness.

It has been said before that ‘Green is the new Growth’ and given the pivotal shift toward renewable energy, and the continued development of the technology to support it, Solar Energy may present an opportune entry point for investors looking for their day in the Sun.


Investing in Solar Energy

Investors looking to get a slice of themes such as the solar energy sector can consider exchange traded funds (ETFs).  ETFs enable investors to invest in a broad basket of securities that represent companies from a specific sector or theme such as cloud computing, the space economy or solar energy.

HANetf is an issuer of a wide variety of megatrend thematic exchange traded funds (ETFs).  When you invest in ETFs, your capital is at risk.

Jane Edmondson is the Co-founder of the Solar Energy UCITS ETF – follow the link for more information


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HANetf's Solar Energy UCITS ETF shines on LSE delivering investors exposure to solar energy area


Important Information:

Communications issued in the UK (ETFs and ETCs)

The content in this document is issued by HANetf Limited (‘HANetf’) and approved by Privium Fund Management (UK) Limited (‘Privium’). HANetf are an appointed representative of Privium, which is authorised and regulated by the Financial Conduct Authority.). HANetf is registered in England and Wales with registration number 10697042.

Communications issued in the European Economic Area (‘EEA’) relating to ETFs

The content in this document is issued by HANetf Management Limited (‘HML’) acting in its capacity as management company of HANetf ICAV. HML is authorised and regulated by the Central Bank of Ireland. HML is registered in Ireland with registration number 621172.

This communication has been prepared for professional investors, but the ETCs and ETFs set out in this communication (‘Products’) may be available in some jurisdictions to any investors. Please check with your broker or intermediary that the relevant Product is available in your jurisdiction and suitable for your investment profile. Past performance is not a reliable indicator of future performance. The price of the Products may vary and they do not offer a fixed income. This document may contain forward looking statements including statements regarding our belief or current expectations with regards to the performance of certain assets classes. Forward looking statements are subject to certain risks, uncertainties and assumptions. There can be no assurance that such statements will be accurate and actual results could differ materially from those anticipated in such statements. Therefore, readers are cautioned not to place undue reliance on these forward-looking statements. The content of this document is for information purposes and for your internal use only, and does not constitute an investment advice, recommendation, investment research or an offer for sale nor a solicitation of an offer to buy any Product or make any investment.  An investment in an exchange traded product is dependent on the performance of the underlying asset class, less costs, but it is not expected to track that performance exactly. The Products involve numerous risks including among others, general market risks relating to underlying adverse price movements in an Index (for ETFs) or underlying asset class and currency, liquidity, operational, legal and regulatory risks. The information contained on this document is not, and under no circumstances is to be construed as, an advertisement or any other step in furtherance of a public offering of securities in the United States or any province or territory thereof, where none of the Issuers (as defined below) or their Products are authorised or registered for distribution and where no prospectus of any of the Issuers has been filed with any securities commission or regulatory authority. No document or information on this document should be taken, transmitted or distributed (directly or indirectly) into the United States. None of the Issuers, nor any securities issued by it, have been or will be registered under the United States Securities Act of 1933 or the Investment Company Act of 1940 or qualified under any applicable state securities statutes.


The Issuers:

1. HANetf ICAV, an open-ended Irish collective asset management vehicle issuing under the terms in the Prospectus and relevant Supplement for the ETF approved by the Central Bank of Ireland (‘CBI’) (‘ETF Prospectus’) is the issuer of the ETFs. Investors should read the current version of the ETF Prospectus before investing and should refer to the section of the ETF Prospectus entitled ‘Risk Factors’ for further details of risks associated with an investment in the ETFs. Any decision to invest should be based on the information contained in the ETF Prospectus.

We believe the information in this document is based on reliable sources, but its accuracy cannot be guaranteed. The views expressed are the views of Hanetf at time of publication and may change. Neither Privium nor Hanetf is liable for any losses relating to the accuracy, completeness or use of information in this communication, including any consequential loss. 


[i] Sources: Bloomberg Energy & Climate Intelligence Unit; Wikipedia; Net-zero refers to new annual carbon emissions on a net basis.
[ii] Source: Wikipedia, ‘Solar Energy’; Fossil fuels contain high percentages of carbon and include petroleum, coal and natural gas.
[iii] Source: Our World in Data, ‘Why did renewables become so cheap, so fast? And what can we do to use this global opportunity for green growth?’ Max Roser, Dec. 1, 2020
[iv] Source: Bloomberg Energy & Climate Intelligence Unit; Net-zero refers to new annual CO2 emissions on a net basis.
[v] Source: U.S. Energy Information Administration, ‘Annual Energy Outlook 2021’ Feb. 8, 2021,for%20most%20of%20that%20growth.


Author: DIY Investor Magazine Categories: DIY Magazine

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