🌱 Clean Energy

Clean energy trades differently than oil and gas. While crude responds to OPEC and geopolitics, clean energy responds to interest rates, government policy, and technology costs.

Why clean energy is different

Clean energy often diverges from XLE — sometimes dramatically.

Core ETFs compared

ICLN — Diversified Global

• Global exposure across solar, wind, hydro
• Lower volatility than pure-plays
• Institutional benchmark

TAN — Solar Pure-Play

• Maximum beta within clean energy
• Significant China exposure
• Higher volatility

QCLN — US + EV Blend

• Tesla exposure (~5-8%)
• US-centric
• Electrification theme

Comparison

Other clean energy ETFs

Key drivers

Interest Rates (Biggest Factor)

Clean energy projects are capital-intensive with 20-30 year paybacks. Higher rates = lower project returns.

2022-2023: Fed rate hikes crushed clean energy despite IRA tailwinds.

Policy & Subsidies

Election risk: US policy can shift dramatically between administrations.

Technology Costs

• Solar panels down ~90% since 2010
• Onshore wind down ~70%
• Battery storage down ~85%

Renewables now economically competitive in many regions.

Key ratios

When to accumulate

Bullish signals:

• Fed signaling rate cuts
• ICLN/SPY bottoming
• New policy support
• Cost declines continuing

Bearish signals:

• Fed hiking rates
• ICLN/XLE falling
• Policy uncertainty
• Project cancellations

Which ETF when?

Quick reference

Related themes