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Tickers in this Article: TAN, FSLR, CSIQ, WFR, KWT, CSUN, SOL
In just one day, enough sunlight strikes the earth's surface to power the entire planet's energy needs for about 27 years. However, less than 0.1% of the world's energy needs are being met via solar power. With traditional energy sources like oil and natural gas becoming strained under our current and future use, governments and institutions have been looking towards alternatives to meet energy requirements. Solar energy is quickly filling that niche, currently growing by 50% per year - making the photovoltaic cell one of the quickest expanding forms of renewable energy. Smart long-term investors, who can stomach the risks involved with an emerging industry, are taking notice. (For more on green investing, check out our Green Investing Special Feature.)

IN PICTURES: 10 Ways To Prepare For Nature's Worst

Follow The Money
The International Energy Agency projects that between 2001 and 2030, almost 9,500 new 500 mega-watt power plants need to be constructed in order to help satiate the planet's increasing energy usage. Alternative and renewable energy is "the largest economic opportunity of the 21st century," according to famed technology venture capitalist and Forbes "Midas List" member, John Doerr. Institutional investors have been following Doerr's lead, pouring billions of dollars into renewable energy companies and research since 2007, far exceeding the measly $150 million invested in solar energy in 2005. With the United States currently making up only 26% of the total market for photovoltaic cells, there is certainly room for growth. And retail investors have the opportunity to participate in the progress.

Exchange-Traded Funds To The Rescue
With companies such as silicon wafer manufacturer MEMC Electronic Materials (NYSE:WFR) and module producer Canadian Solar (Nasdaq:CSIQ), the sun-power segment of the alternative market is quite diverse. Add this to the rapidly changing nature of the growing industry and you can see how assembling a portfolio of solar stocks can be a daunting task. Most retail investors wanting to participate in this space would be better suited in one of the few exchange-traded products in this area. ETFs allow instant diversification, intra-daily trading and other benefits. There are currently two ETFs on the market specifically dealing with the solar industry - the Market Vectors Solar Energy ETF (NYSE:KWT) from Van Eck Global and the Claymore/MAC Global Solar Energy (NYSE:TAN) from Claymore Securities. Both follow a similar index of global solar companies. However, clever ticker symbol aside, the Claymore fund is my preferred choice in this area due its 10.5 times trading volume versus the Van Eck ETF. In addition, it has hefty assets under management. (To learn more about ETFs, read our Exchange-Traded Funds Special Feature.)

Getting A TAN
The Claymore Solar ETF offers investors a truly global representation of the solar industry, with the United States making up only 23% of the index. The fund, however, is concentrated, with only 26 total holdings, so volatility will occur. The ETF includes positions in low cost leader First Solar (Nasdaq:FSLR) in addition to several corporations not listed on U.S. exchanges, such as Germany's SolarWorld AG and Spain's Solaria Energia. The fund also includes several of the recent U.S.- listed Chinese solar companies such as China Sunergy (Nasdaq:CSUN) and ReneSola (NYSE:SOL). The fund overall has performed poorly, down nearly 73% since its inception. It should be noted, however, that the fund did start trading in April of 2008, right when the current economic downturn kicked into high gear. In addition, the fund has bounced well off of its 52-week low of $4.65. Given the long-term nature of the industry, it should continue to grow for an extended time. The Claymore ETF charges a modest 0.65% in expenses and pays an annual dividend.

Bottom Line
As the world's energy usage ever increases, alternatives will be needed to meet demand. Solar energy represents an abundant renewable resource that has just begun to be tapped. As investments in sun research continue to grow, so do prospects. Retail investors with long enough time frames who also can handle the risks involved with a growth industry will be handsomely rewarded. The preceding Claymore Solar ETF is great way for individuals to play the sector and profit from its expansion. (For more, read Spotlight On The Solar Industry.)

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