Invesco Solar ETF offers company and geographic diversification to help shield investors from U.S. policy risk while capturing international growth. That’s because global solar installation forecasts remain robust despite U.S. regulatory uncertainty.
However, that uncertainty means the fund exhibits extreme volatility. That makes it riskier for investors. Legislative threats remain substantial: U.S. Senate proposals call for phasing out solar tax credits by 2028, and the January 1, 2026, deadline for various tax provisions creates a cliff effect where project economics could deteriorate further.
INVESCO SOLAR ETF (New York symbol TAN; buy or sell through brokers) tracks solar-related companies (including technology firms and utilities) listed on global exchanges.
Its top holdings are First Solar (China; solar panels), 9.3%; NEXTracker Inc. (U.S. solar trackers), 9.3%; GCL Technology (China; polysilicon), 7.5%; Enphase Energy (U.S.; home solar systems), 6.9%; Sunrun (U.S.; panels), 6.5%; and Xinyi Solar (China; solar panels), 5.0%.
The ETF’s MER is a relatively high 0.67%.
Invesco Solar faces significant headwinds going forward
Renewable stocks have drifted down since early 2021; that follows big run-ups in 2020 on former U.S. President Joe Biden’s support for sun, wind and hydro power—plus strong investor interest in stocks gaining from environmental concerns.
The long-term outlook for renewables remains positive as governments and corporations move steadily away from fossil fuels.
But the near-term outlook for solar has weakened lately as both the U.S. and China have reduced support for the sector. For instance, China has removed grid access for all new large-scale commercial and industrial solar projects. New Chinese renewable power projects are also no longer guaranteed minimum purchase prices or grid volumes.
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Meanwhile, the Trump administration has implemented significant headwinds for the solar sector through multiple policy channels.
In September 2025, the Solar Energy Industries Association reported that the U.S. solar industry faces installation capacity declines of approximately 27% between 2026 and 2030 compared to pre-tax reform projections, driven by rollbacks in subsidies under the Inflation Reduction Act.
Additionally, the administration has pursued higher tariffs on imported solar components, with duties as high as 30% on foreign solar equipment, increasing installation costs during a period when the sector needs growth acceleration.
Recommendation in Canadian Wealth Advisor: Invesco Solar ETF is a hold.
