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Zacks Industry Outlook Highlights: SolarCity, Sempra Energy and Duke Energy

SCTY SRE DUK

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For Immediate Release

Chicago, IL – June 10, 2013 – Today, Zacks Equity Research discusses the U.S. Alternative Energy, including SolarCity Corporation (SCTY - Free Report), Sempra Energy (SRE - Free Report) and Duke Energy Corporation (DUK - Free Report).

Industry: Alternative Energy

Link: http://www.zacks.com/commentary/27652/alternative-energy-stock-outlook-june-2013

Environmental advantage: Solar power is the most benign electricity resource. Solar cells generate electricity without air or water emissions, noise, vibration, habitat impact or waste generation. Over time, rapid population growth, depletion of non-renewable conventional sources, and escalating pollution levels will help shape a much more pronounced global focus on renewable projects.

Fuel risk advantage: Unlike fossil and nuclear fuels, alternative energy has no risk of fuel price volatility or delivery risk. Although there is variability in the amount and timing of sunlight in the day, season and year, a properly sized and configured system can be designed to ensure high reliability while providing a long-term, fixed-price electricity supply.

Among the renewable energy pack, we would advise investors to look for companies like rooftop solar energy systems provider SolarCity Corporation (SCTY - Free Report) with an innovative game plan. The downstream solar company plays on its strength providing renewable power lower than the grid price to residential and commercial markets in the U.S.

Location advantage: Unlike other renewable resources such as hydroelectricity and wind power, solar power is generally located at a customer’s site due to the universal availability of sunlight. As a result, solar power limits the expense and losses associated with transmission and distribution from large-scale electric plants to the end users. For most residential consumers seeking an environment-friendly power alternative, solar power is currently the only viable choice.

Environmental legislation: Alternative energy companies are increasingly benefiting from new legislation in the U.S. stipulating installation of renewable sources of electricity generation as mandated by Renewable Energy Standards (RES). As of now there are 30 states and the District of Columbia in the U.S. that have RES legislation in place. Another 7 states also have nonbinding goals for adoption of renewable energy sources.

At the federal level, Congress has extended the 30% federal investment tax credit (ITC) to both residential and commercial solar installations until Dec 31, 2016. Also, under the American Reinvestment and Recovery Act (ARRA), the U.S. Treasury Department had earlier implemented a program to issue cash grants in lieu of investment tax credit for renewable energy projects.

The wind sector has also benefited significantly from the PTC over the last few years. It was started in 1992 as a part of the Energy Policy Act of 1992. Subsequent to that it has received life extension of half a dozen times. In the first decade of a renewable energy facility’s lifespan, the PTC provides a $0.022/kilowatt-hour investment tax credit benefit.

Need for a pollution-free environment: Globally, utilization of renewable energy is rising primarily due to its clean nature and a growing awareness among the masses regarding its benefits. This has influenced utility providers, like Sempra Energy (SRE - Free Report) and Duke Energy Corporation (DUK - Free Report), to shift their mode of power generation to solar, wind and water.

Recently, a Duke Energy Corporation unit − Duke Energy Renewables − has completed the acquisition of two commercial solar power projects from SolarWorld for an undisclosed amount. Since 2007, Duke Energy has invested more than $2.5 billion to grow its commercial wind and solar business.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

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