As global climate action gains momentum and clean energy becomes central to investment strategies, solar exchange-traded funds (ETFs) are seeing renewed interest from ESG-conscious investors. With government incentives, technological advancements, and a growing push for net-zero emissions, 2025 could be a breakout year for solar-focused funds.
Whether you’re a retail investor or a long-term portfolio builder, solar ETFs offer a smart way to gain exposure to companies shaping the future of clean power.
Why Invest in Solar ETFs?
Solar ETFs track the performance of solar energy companies involved in panel manufacturing, installation, semiconductor production, and renewable infrastructure. Unlike individual solar stocks that can be volatile, ETFs spread risk across multiple holdings — making them attractive for long-term diversification.
Additionally, many solar ETFs are part of broader clean energy or ESG portfolios, aligning your investments with sustainability goals.
Best Solar ETFs for 2025
While past performance doesn’t guarantee future returns, several solar ETFs have consistently outperformed broader market indices during clean energy uptrends. Here are a few key funds to watch:
1. Invesco Solar ETF (TAN):
A benchmark solar ETF that tracks the MAC Global Solar Energy Index, with top holdings in Enphase Energy, SolarEdge, and First Solar.
2. iShares Global Clean Energy ETF (ICLN):
Though broader than just solar, ICLN includes exposure to solar power leaders, making it ideal for diversified clean energy exposure.
3. Invesco Global Clean Energy ETF (PBD):
This fund includes solar-focused companies globally and emphasizes mid-cap growth firms leading solar innovation.
4. ALPS Clean Energy ETF (ACES):
While not exclusively solar, ACES holds a strong basket of companies across solar infrastructure, battery storage, and power management.
5. First Trust NASDAQ Clean Edge Green Energy Index Fund (QCLN):
A tech-forward ETF with exposure to solar and EV sectors, appealing to investors seeking crossover opportunities.
Growth Outlook for Solar in 2025
With U.S. and global solar capacity expected to grow significantly through 2025, solar ETFs are well-positioned to benefit. Factors like tax credits under the Inflation Reduction Act, EU decarbonization mandates, and India’s solar mission continue to drive demand.
Additionally, solar costs are declining, adoption is expanding in residential and commercial sectors, and investor interest in ESG assets is at an all-time high.
Who Should Consider Solar ETFs?
- Long-term investors seeking clean energy exposure
- ESG and sustainability-driven portfolios
- Tech and infrastructure investors looking for solar crossover
- Millennials and Gen Z investors committed to climate investing
Final Thoughts
The renewable energy revolution is accelerating, and solar ETFs offer a convenient, diversified, and potentially high-growth way to invest in it. As the transition to clean power becomes more urgent, keeping an eye on top-performing solar ETFs in 2025 could pay long-term dividends both financially and ethically.