We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Space-Based Solar Power Race Heats Up: ETFs to Play a New Growth Theme
Read MoreHide Full Article
Key Takeaways
The push for reliable clean energy could support long-term interest in SBSP.
Satellite technology and solar innovation could benefit from growing SBSP investments.
Space and solar ETFs offer complementary exposure to the emerging space-based solar power theme.
The race to harness solar energy from space is gaining momentum, with several countries stepping up efforts to develop space-based solar power (SBSP) technology. According to OilPrice.com, governments worldwide are exploring SBSP projects to tap into solar energy beyond Earth while overcoming some of the land constraints associated with conventional solar installations.
Major economies, including the United States, China, the United Kingdom and Japan, are among those pursuing projects to explore its commercial viability and potential to deliver solar power from space. Economies are also committing substantial financial resources to develop SBSP systems to expand clean energy supplies and provide an alternative to conventional solar power generation.
SBSP systems are designed to place solar power-generating satellites in geostationary orbit, approximately 35,000 km above Earth, where they can capture sunlight and beam energy to massive solar reflectors on the ground using microwaves or lasers. If successfully deployed at scale, these systems could generate multiple gigawatts of clean electricity and supply power to remote regions without requiring extensive grid expansion or large local power plants.
Why Is SBSP Gaining Attention?
While power generation from solar power is gaining momentum, conventional solar installations face limitations from nighttime, cloud cover, atmospheric conditions and seasonal variations. Nearly 30% of incoming solar radiation does not reach Earth's surface, whereas solar panels in space could access sunlight more consistently without atmospheric interference.
At the same time, rising global power consumption is increasing the need for diversified and reliable energy sources. Rapid expansion of AI and the resulting surge in electricity demand from data centers, along with growing efforts by economies to strengthen energy independence, are adding to the investment appeal of SBSP.
Advancements in SBSP technology could open up new avenues for clean energy generation, helping economies diversify their energy mix, reduce reliance on fossil fuels and meet rising electricity demand. Its potentially higher power density could make it a valuable addition to the global energy mix, particularly as AI data centers drive power consumption higher. By providing an alternative source of clean electricity, SBSP could also help address growing environmental concerns surrounding the rapid expansion of AI infrastructure.
Space-Based Solar Attracts Big Tech Ambitions
In January, SpaceX (SPCX - Free Report) sought Federal Communications Commission (FCC) approval to launch a constellation of up to 1 million satellites designed to harness space-based solar power for AI data centers.
According to the FCC filing, the system could leverage near-constant solar energy to improve energy efficiency and lower operating and maintenance costs, while reducing the environmental footprint of terrestrial data centers, as quoted on the OilPrice.com article.
In another development, Overview Energy aims to launch an SBSP satellite constellation by 2030 to supply 1 GW of power to Meta's AI data centers, potentially providing the tech giant with continuous access to solar energy across different locations. The startup announced this plan in April, as quoted in the abovementioned article.
Meanwhile, China's Zhuri project has made progress in key SBSP technologies, including microwave-based wireless power transmission. It has developed an Earth-based system to test wireless power delivery to multiple moving targets.
How Can Investors Play This Emerging Theme
Space-based solar power offers investors an opportunity to tap into an emerging growth theme beyond the traditional AI ecosystem and technology sector. Investors may be better served by maintaining a long-term investment horizon to fully capture the theme's growth potential.
That being said, while commercial deployment is currently expected between the 2030s and 2050s, the development of this technology could drive investments across the broader space and solar ecosystems well before its commercialization. Moreover, growing electricity demand from AI data centers could accelerate research and commercialization efforts, creating potential opportunities for both space and solar companies.
Space companies involved in satellite manufacturing, launch services, orbital infrastructure and wireless power transmission could be among the earliest beneficiaries as governments and private players ramp up investments in the technology. Meanwhile, advancements in high-efficiency photovoltaic cells, solar materials and energy conversion technologies could create opportunities for solar companies.
Thus, space and solar ETFs offer complementary ways to gain exposure to this emerging investment theme. Space ETFs provide access to the infrastructure and commercialization opportunity, while solar ETFs offer exposure to the underlying photovoltaic technologies and broader solar energy ecosystem.
Among the mentioned funds, NASA is both the largest and the most liquid fund, with a one-month average trading volume of about 2.43 million shares and an asset base of $796.4 million. Regarding annual fees, both WARP and ORBX are the cheapest options, charging an annual fee of 0.50%, making them more suitable for long-term investing.
Solar ETFs to Consider
Investors can consider increasing exposure to Invesco Solar ETF (TAN - Free Report) . The fund seeks to track the performance of MAC Global Solar Energy Index and charges an annual fee of 0.70%. TAN has gathered an asset base of $1.09 billion and has a one-month average trading volume of about 1.89 million shares.
For a broader exposure to the solar energy market, investors can consider iShares GlobalClean Energy ETF (ICLN - Free Report) and First Trust NASDAQ Clean Edge Green Energy ETF (QCLN - Free Report) .
View the Zacks #1 Rank List
Image: Bigstock
Space-Based Solar Power Race Heats Up: ETFs to Play a New Growth Theme
Key Takeaways
The race to harness solar energy from space is gaining momentum, with several countries stepping up efforts to develop space-based solar power (SBSP) technology. According to OilPrice.com, governments worldwide are exploring SBSP projects to tap into solar energy beyond Earth while overcoming some of the land constraints associated with conventional solar installations.
Major economies, including the United States, China, the United Kingdom and Japan, are among those pursuing projects to explore its commercial viability and potential to deliver solar power from space. Economies are also committing substantial financial resources to develop SBSP systems to expand clean energy supplies and provide an alternative to conventional solar power generation.
SBSP systems are designed to place solar power-generating satellites in geostationary orbit, approximately 35,000 km above Earth, where they can capture sunlight and beam energy to massive solar reflectors on the ground using microwaves or lasers. If successfully deployed at scale, these systems could generate multiple gigawatts of clean electricity and supply power to remote regions without requiring extensive grid expansion or large local power plants.
Why Is SBSP Gaining Attention?
While power generation from solar power is gaining momentum, conventional solar installations face limitations from nighttime, cloud cover, atmospheric conditions and seasonal variations. Nearly 30% of incoming solar radiation does not reach Earth's surface, whereas solar panels in space could access sunlight more consistently without atmospheric interference.
At the same time, rising global power consumption is increasing the need for diversified and reliable energy sources. Rapid expansion of AI and the resulting surge in electricity demand from data centers, along with growing efforts by economies to strengthen energy independence, are adding to the investment appeal of SBSP.
Advancements in SBSP technology could open up new avenues for clean energy generation, helping economies diversify their energy mix, reduce reliance on fossil fuels and meet rising electricity demand. Its potentially higher power density could make it a valuable addition to the global energy mix, particularly as AI data centers drive power consumption higher. By providing an alternative source of clean electricity, SBSP could also help address growing environmental concerns surrounding the rapid expansion of AI infrastructure.
Space-Based Solar Attracts Big Tech Ambitions
In January, SpaceX (SPCX - Free Report) sought Federal Communications Commission (FCC) approval to launch a constellation of up to 1 million satellites designed to harness space-based solar power for AI data centers.
According to the FCC filing, the system could leverage near-constant solar energy to improve energy efficiency and lower operating and maintenance costs, while reducing the environmental footprint of terrestrial data centers, as quoted on the OilPrice.com article.
In another development, Overview Energy aims to launch an SBSP satellite constellation by 2030 to supply 1 GW of power to Meta's AI data centers, potentially providing the tech giant with continuous access to solar energy across different locations. The startup announced this plan in April, as quoted in the abovementioned article.
Meanwhile, China's Zhuri project has made progress in key SBSP technologies, including microwave-based wireless power transmission. It has developed an Earth-based system to test wireless power delivery to multiple moving targets.
How Can Investors Play This Emerging Theme
Space-based solar power offers investors an opportunity to tap into an emerging growth theme beyond the traditional AI ecosystem and technology sector. Investors may be better served by maintaining a long-term investment horizon to fully capture the theme's growth potential.
That being said, while commercial deployment is currently expected between the 2030s and 2050s, the development of this technology could drive investments across the broader space and solar ecosystems well before its commercialization. Moreover, growing electricity demand from AI data centers could accelerate research and commercialization efforts, creating potential opportunities for both space and solar companies.
Space companies involved in satellite manufacturing, launch services, orbital infrastructure and wireless power transmission could be among the earliest beneficiaries as governments and private players ramp up investments in the technology. Meanwhile, advancements in high-efficiency photovoltaic cells, solar materials and energy conversion technologies could create opportunities for solar companies.
Thus, space and solar ETFs offer complementary ways to gain exposure to this emerging investment theme. Space ETFs provide access to the infrastructure and commercialization opportunity, while solar ETFs offer exposure to the underlying photovoltaic technologies and broader solar energy ecosystem.
Space ETFs to Consider
Investors can consider Tema Space Innovators ETF (NASA - Free Report) , Procure Space ETF (UFO - Free Report) , ARK Space & Defense Innovation ETF (ARKX - Free Report) , Global X Space Tech ETF (ORBX - Free Report) and VanEck Space ETF (WARP - Free Report) .
Among the mentioned funds, NASA is both the largest and the most liquid fund, with a one-month average trading volume of about 2.43 million shares and an asset base of $796.4 million. Regarding annual fees, both WARP and ORBX are the cheapest options, charging an annual fee of 0.50%, making them more suitable for long-term investing.
Solar ETFs to Consider
Investors can consider increasing exposure to Invesco Solar ETF (TAN - Free Report) . The fund seeks to track the performance of MAC Global Solar Energy Index and charges an annual fee of 0.70%. TAN has gathered an asset base of $1.09 billion and has a one-month average trading volume of about 1.89 million shares.
For a broader exposure to the solar energy market, investors can consider iShares Global Clean Energy ETF (ICLN - Free Report) and First Trust NASDAQ Clean Edge Green Energy ETF (QCLN - Free Report) .