President Joe Biden’s stand on a cleaner greener America has been very clear right from his campaign days. And true to his word, the President rejoined the 2015 Paris Climate Agreement as soon as he took office. He also initiated action to replace up to 645,000 government fleet vehicles with EVs.

But more should follow given that his proposal talked about a $400 billion infusion into things like battery technologies and EVs. This could take care of continued subsidies (GM and Tesla have already surpassed the 200,000 unit limit, so their cars don’t qualify for the $7,500 tax credit). Although, with Biden, the focus is likely to be on middle-class consumers with a preference for “made in America”. More money could also flow into new charging stations that are necessary but expensive to build, and remains one of the biggest deterrents to EV adoption. Money could also be diverted into R&D because the limited range and long charging time of EVs also turn customers away. There could also be cash for clunker scheme that offers some consideration to people so they trade in their old vehicles and opt for EVs instead.

Biden’s election promises also included a $2 trillion investment in clean energy with the goal of making electricity carbon-free by 2035. This would include other than EVs, the promotion of energy efficiency in buildings and agriculture.

So the whole segment looks very attractive as of now. The only problem is that everyone wants to jump on the bandwagon, so stock valuations aren’t making that much sense. Especially since all these promises will take time to become policy and then be implemented. So there may be a limited near-term impact. Moreover, it’s also difficult to determine which stocks will benefit more than others.

So we are in a kind of situation where we know that good things are afoot, but we don’t know when exactly they will happen or which stocks will benefit the most.

And this is exactly when it could pay to diversify, i.e. play the whole market instead of any individual stock. And as you know, you can do that really well with ETFs.

One thing to keep in mind though is the nature of the asset class. Since there aren’t that many publicly-traded companies in the clean energy segment yet, the diversification offered is also limited to that extent.

Here are a few clean energy ETFs that gives you exposure to the segment at relatively lower risk-

iShares Global Clean Energy ETF (ICLN Quick Quote ICLN - Free Report)

The fund includes both domestic and international stocks, although the largest holdings are in domestic companies. ICLN offers fairly broad exposure to the clean energy segment with companies' holdings in wind power, solar power, and other renewable sources.

Plug Power Inc. (PLUG Quick Quote PLUG - Free Report), which focuses on the design, development, commercialization, and manufacture of hydrogen fuel cell systems used primarily for the material handling and stationary power market, is its top holding (10.89%).

Enphase Energy, Inc. (ENPH Quick Quote ENPH - Free Report) makes intelligent solar home energy platforms that combine the generation, storage, and control of energy and its management. This is the second-largest holding (5.45%).

DAQO (DQ Quick Quote DQ - Free Report) and Ormat Technologies (ORA Quick Quote ORA - Free Report) are other top holdings.

The expense ratio is 0.46% and AUM is $6,947.7 million.

Invesco Global Clean Energy ETF PBD

This is another global ETF with exposure to various types of clean energy including wind, solar and hydro. While not equal-weighted, there is a much lower concentration in each of the holdings, which include companies like FuelCell Energy, Inc. (FCEL Quick Quote FCEL - Free Report), PLUG, DQ, Lithium Americas (LAC), Ballad Power Systems (BLDP Quick Quote BLDP - Free Report), SPWR, etc.

The expense ratio is 0.75% and AUM is $488.5 million.

First Trust NASDAQ Clean Edge Green Energy Index Fund (QCLN Quick Quote QCLN - Free Report)

This ETF includes companies a larger number of companies that are focused on a number of activities related to the different sub-sectors like biofuels, solar energy, and advanced batteries among other things. So it offers broader exposure than the other two.

Its top holdings are Tesla (TSLA Quick Quote TSLA - Free Report), PLUG, ENPH, NIO, etc.

But it isn’t exactly cheap with an expense ratio of 0.60 and AUM of $3,194.7 million.

Invesco Solar ETF (TAN Quick Quote TAN - Free Report)

As the name indicates, this is a narrowly-focused solar ETF offering exposure to companies like ENPH (10.6%), SolarEdge Technologies (SEDG), DQ, Sunrun (RUN Quick Quote RUN - Free Report), First Solar (FSLR Quick Quote FSLR - Free Report), SPWR, etc.

Its expense ratio is 0.69% and AUM is $4,932.4 million.