Clean or renewable energy stocks saw choppy trade last year as investors fled these victims of crude oil crash. A supply glut and lower demand in the wake of a global slowdown took oil prices to multi-year lows. While weak demand wrecked havoc in the conventional energy field, its ripples played a key role in pushing the clean energy space to red (read: Clean Energy ETFs: Losers of the Crude Oil Crash?).

However, thankfully, the waning trend in clean energy changed its course to start 2015 and the sector saw smart gains even as oil prices remained volatile. The demand for renewable energy, in particular solar and wind, is rapidly growing for electricity generation in the U.S. Plus president Barrack Obama’s ‘Climate Change Action Plan’ has done a lot in driving up the sector from last year’s lows.

The President’s latest budget proposes the Congress to permanently extend tax credits for the solar and wind industry. The fiscal 2016 budget request includes a $7.4 billion fund for clean energy technologies, above the $6.5 billion enacted by the Congress for this year. The tax incentives for both solar and wind energy operators are likely to cost the government about $31.5 billion over a decade (read: Obama Budget Plan Drives Up These Sector ETFs).

If this was not enough, SunEdison Inc. (SUNE), the world’s leading developer of solar energy, delivered a bullish outlook of more than double installation in 2015.  Bloomberg recently reported that the oil price rout will not be able to ravage the renewable energy space.

To substantiate its view, Bloomberg noted that solar energy has never been the direct competitor of oil as the former is used more for electricity purposes while the later is inclined to transportation. Moreover, the actual drop in oil prices are hardly reflecting in pumps as most Asian economies are making the most of this unprecedented decline to lower fuel subsidies, boost taxes and shore up national reserves.

All these should keep the demand for green energy alive going forward and have already culminated into pushing the space higher. Moreover, the sector is well placed in the top 31% of the Zacks Industry Rank, suggesting bullish fundamentals for the green stocks in the coming months. Below, we have highlighted three ETFs to watch on this upturned:

iShares Global Clean Energy ETF (ICLN)
 
This ETF tracks the S&P Global Clean Energy Index with 30 holdings and an asset base of about $62 million. ICLN has added the most this year in the clean energy space having gained about 25% (as of March 5, 2015).

 In terms of geographical breakdown, China leads the list with 42%, while the U.S. holds the second spot with 21.4%. Hanergy, Vestas and Gamesa Corp. are the top three holdings. The fund charges investors 47 basis points a year in fees for the exposure.

Huge exposure to China is benefitting the fund big time as the nation pledged to cut carbon emissions by 2030 by installing more panels and raise the non-fossil fuel share of all energy (read: Green & Dirty ETFs to Watch on Clean Climate Push).

First Trust Nasdaq Clean Energy Green Energy Index (QCLN)

This ETF tracks the NASDAQ Clean Edge Green Energy Index and follows a benchmark of clean energy companies, giving exposure to 48 such companies in total with an asset base of $83.3 million. The fund charges investors 60 basis points a year in fees for the exposure. This product has added about 9% so far this year (see Clean Energy ETFs for A Green Portfolio).

Technology firms dominate this ETF, accounting for 38.2% of the assets. Beyond technology, Oil and Gas stocks make up about 24.3%, taking the second spot. In terms of geographical diversification, the fund is almost entirely focused on the U.S. market.

PowerShares Global Clean Energy Portfolio (PBD)

This product again provides global exposure to stocks that focus on greener and generally renewable sources of energy as well as technologies that facilitate cleaner energy. This is done by tracking the WilderHill New Energy Global Innovation Index. Holding 104 stocks in its basket, the fund adopts a widely spread-out across the individual security.

In terms of countries, the U.S. makes up about one-third of the portfolio, followed by China (15.7%). The product has amassed about $66.3 million in assets. Expense ratio came in at 0.81%. The ETF is up about 9% so far this year.

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