Guggenheim Solar ETF (TAN) In Focus As U.S. Considers Solar Tariffs

The solar industry will be under increased scrutiny from investors in the near future, as U.S. regulators consider emergency tariffs on solar imports.

Reuters notes that growing competition among the top solar cell producing nations, along with a shift in energy policy under the new president, have inspired the proposed measures:

The United States has notified the other 163 members of the World Trade Organization that it is considering putting emergency “safeguard” tariffs on imported solar cells, according to a WTO filing published on Monday.

The move raises the stakes in a global battle to dominate the solar power industry, which has grown explosively in the past five years. As production has increased, prices have tumbled, favoring producers who can take advantage of economies of scale.

The United States, China, and India are the top three solar cell producers, and all three nations want to become the global leader in producing and exporting the products. The all-out war has led to several nefarious business practices among the countries.

The WTO ruled in September 2017, for example, that India had illegally discriminated against U.S. solar exports. India responded with its own complaint about several U.S. states offering solar subsidies.

“The petition alleges that increasing imports have taken market share from domestic producers and have led to bankruptcies, plant shutdowns, layoffs, and a severe deterioration of the financial performance of the domestic industry,” the U.S. filing for the temporary tariff said.

The Guggenheim Solar ETF (NYSE:TAN) was trading at $18.62 per share on Tuesday afternoon, up $0.22 (+1.20%). Year-to-date, TAN has gained 12.37%, versus a 8.06% rise in the benchmark S&P 500 index during the same period.

TAN currently has an ETF Daily News SMART Grade of B (Buy), and is ranked #13 of 38 ETFs in the Energy Equities ETFs category.