Investors Flee Solar ETF on Shaky Subsidies and Rate Hike Danger

A one-time standard bearer for the boom in clean-energy funds is bleeding cash as solar stocks are battered by everything from rising rates to possible subsidy reductions — and President Joe Biden’s stalled infrastructure plan.

Invesco Ltd.’s $2.4 billion Solar ETF (ticker TAN) suffered $417 million of outflows in December, the worst month in its nearly 14-year history. The outflows have continued as its share price has dropped almost 30% since October.

While solar stocks have been caught up in the extensive rotation out of the high-growth technology firms as the Federal Reserve prepares to raise interest rates, Todd Rosenbluth, ...