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Stock of the Week: NextEra Energy

Solar making up 40% of electricity supply by 2035?

Andrew Willis 18 October, 2021 | 4:28AM
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Andrew Willis: As we head into Fall, I wondered with the changing seasons whether solar panels would have a harder time generating electricity… But it turns out rain can help keep the panels clean, and the rays still make their way through the clouds.

Not that NextEra Energy (NEE) needs to worry about that too much as it operates in the Sunshine State. With nearly 30 gigawatts in the pipeline, the largest developer of renewable energy in the U.S. has exceptional regulatory relations in Florida to build out a giant solar project  - and meet massive expectations.

U.S. President Joe Biden announced clean energy targets, endorsing the idea of a 45% solar electricity supply in the U.S. by 2050. But the U.S. Department of Energy report suggests solar could be powering homes much earlier, at 40% of supply by 2035.

And of all the companies available to meet this demand, senior equity analyst Andrew Bischof says NextEra is best positioned for the clean energy transition. We think solar investments are a key reason they can exceed their 6 to 8% earnings growth targets.

Meanwhile, investors should keep in mind that success is contingent on cooperation with regulators around electricity rates – or that Elon Musk doesn’t turn everyone’s roofs into solar panels.

For Morningstar, I’m Andrew Willis.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
NextEra Energy Inc81.19 USD3.55Rating

About Author

Andrew Willis

Andrew Willis  Senior Editor at Morningstar.ca. Follow him on Twitter @AndrewWillisCDN.

 

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