Manage US stocks, Korean stocks, and ETFs in one place and auto-rebalance to your target allocation
Real-time US & KR stock prices
Auto buy/sell calculation
Cloud sync supported
Sector Analysis2026-02-09
Clean Energy ETF Icln 65 Percent
ICLN, the global clean energy ETF, has staged a dramatic comeback with an annual return of 66%. The rally has been driven by a surge in electricity demand from AI data centers and improving earnings among solar energy companies.
Admin
Clean energy ETFs, which suffered a severe slump in 2023–2024, are staging a dramatic comeback. ICLN (iShares Global Clean Energy ETF) has reached $18.61, delivering an annual return of 66.0%. This is a remarkable turnaround given its five-year annualized return of -8.55%. Three forces are driving the recovery: a surge in electricity demand from AI infrastructure expansion, tightening global carbon regulations, and improving profitability among solar and wind energy companies. We analyze whether the clean energy sector has re-entered a structural growth trajectory.
The Power Demand Revolution Created by AI
The biggest bottleneck in Big Tech's $650 billion AI investment is electricity supply. A single AI data center consumes as much power as a small city, and hyperscalers' carbon neutrality pledges are driving a surge in renewable energy demand. Microsoft and Amazon have signed large-scale long-term solar and wind power purchase agreements (PPAs), significantly improving revenue visibility for clean energy companies. ICLN's top holdings—Bloom Energy (9.4%) and First Solar (7.2%)—are direct beneficiaries of this trend.
Analysis of ICLN's Portfolio Composition
ICLN invests in 128 global clean energy companies, with an expense ratio of 0.39% and a dividend yield of 1.44%. Its P/E ratio of 22.55x is reasonable given the sector's growth potential. Top holdings include NextPower (9.6%), Bloom Energy (9.4%), First Solar (7.2%), Iberdrola (5.7%), and China Yangtze Power (4.6%). Diversified across the US, Europe, and Asia, the fund reduces regional concentration risk while covering sub-sectors including solar, wind, hydrogen, and geothermal energy.
The Link Between ESG Investing and Clean Energy
Global ESG investment trends are creating a structural inflow of capital into the clean energy sector. Among companies included in ESGU (ESG US Large Cap) and ESGV (ESG Broad Market), the weighting toward clean energy-related businesses is expanding. Europe's CBAM (Carbon Border Adjustment Mechanism) and the remaining benefits of the US IRA (Inflation Reduction Act) are strengthening the competitive position of clean energy companies. KRBN (Carbon Allowances ETF) is also a complementary investment vehicle for those betting on rising carbon prices.
Clean Energy Allocation and Rebalancing
After a 66% surge, many investors will find that their ICLN allocation has significantly exceeded its target weight. It is advisable to use a rebalancing calculator to review your current allocation and redistribute the excess into other sectors. A recommended clean energy sector weighting is 3–7% of the total portfolio. Using an asset allocation calculator to combine ICLN with XLE allows investors to balance exposure between traditional and new energy sources. Those holding TQQQ alongside ICLN should be cautious of over-concentration in growth sectors.
Conclusion
The resurgence of clean energy ETFs is underpinned by a new growth driver: AI-driven electricity demand. ICLN is showing a strong rebound after five years of underperformance, and structural growth is expected as global carbon neutrality trends continue. That said, following such a sharp 66% rally, a prudent investment strategy involves using rebalancing tools to manage your allocation and an asset allocation calculator to maintain sector balance across the overall portfolio.
