The recent volatility of fossil fuel prices, increasing concerns about the role of carbon dioxide emissions in global climate change, and the geopolitical benefits of achieving energy independence have fostered an unprecedented amount of support behind nontraditional renewable sources of power. Claymore/MAC Global Solar Energy reflects the global interest this sector has garnered as many of its equity holdings are based in developed nations across the globe.

Industry Fundamentals
While environmentally friendly solar power sources are undeniably a laudable goal, the economics and feasibility of the proposed technologies remain questionable. While some would argue that these technologies need to be pursued at any cost, the reality of today's economic climate is that speculative financing is scarce, and the fossil fuels that were so expensive just one year ago are no longer at stratospheric levels. Although the current financial crisis has made financing these capital-intensive research and development projects problematic, and falling energy prices have further compressed their earnings potential, many governmental mandates are adequately motivating companies to go forward with their renewable energy project plans. Hence, the perceived need for alternative energy sources has only moderated rather than disappeared completely.

Distributed generation, the concept of having large power plants that send power to consumers over transmission lines, is dominated by three traditional sources: coal, nuclear, and natural gas. Over the past 30 years, the economics when considering which plant to build favored the extremely low fixed costs of natural gas plants for peak demand periods and the low variable costs of coal and nuclear for around-the-clock baseload power. However, costs of these traditional sources have risen dramatically while demand for power has grown unabated.