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Duke Energy Plans to Build Solar Power Plants in Kentucky

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Electric services provider, Duke Energy Corporation (DUK - Free Report) , recently revealed its plans of constructing three solar facilities in Northern Kentucky. These solar units will incorporate 31500 solar panels and generate over 6.8 megawatts (MW) of electricity. Notably, these stations will directly serve the customers of Kentucky.

Details of the Project

Out of the three units, Walton Solar Power Plants 1 & 2, will be built in Kenton County. The site will have 19,000 solar panels installed and the capability of generating more than 4 MW of electricity.

The third one – Crittenden Solar Power Plant – will be located in Grant County and will incorporate 12,500 panels. This plant will produce more than 2.7 MW of electricity.

The company has laid down plans of completing a major part of the construction by the end of 2017. On being operational, these plants will be able to offer electricity to almost 1,300 average-sized homes.

Duke Energy’s Take on the Project

With increasing demand for electricity in Kentucky, Duke Energy aims at making most of the opportunity by setting up more solar power plants in the state. Moreover, cost of building solar projects is cheaper than before, making it more cost-competitive compared with other sources of power generation. Being an experienced solar power supplier, Duke Energy enjoys a competitive edge over peers in reaching out to more customers. The company already serves 850,000 customers in the Ohio/Kentucky region.

The three solar power plants set to be constructed in Northern Kentucky will complement Duke Energy Kentucky's existing power generation fleet in Kentucky, which incorporates a 650 MW coal-fired plant and a 500-MW gas-fired facility.

Our View

The solar energy market in the U.S has evolved greatly in past few years. Since 2008, solar installations in the country have grown seventeen-fold from 1.2 gigawatts (GW) to an estimated 30 GW today.

Duke Energy is a premier utility service provider offering efficient power and energy services across various states in the U.S. and other international areas. We appreciate the company’s efforts of expanding its scale of operations, pursuing additional generation projects and introducing solar projects to meet growing demands for renewable energy in the dynamic environment.

In pursuit of green energy, the company has invested more than $5 billion since 2007. As of Mar 2017, Duke Energy Renewables owns and operates about 2,894 MW of renewable energy out of which 583 MW is solar.

Despite President Trump’s withdrawal of the U.S. from the Paris agreement and the strong steps taken by his administration to abolish the Clean Power plan, utilities are still inclined toward adopting renewable as source of energy. This is because, although Trump is currently aiming to revive the coal industry, no one can deny the fact that renewable energy is the future.

Notably, 2,044 MW of solar PV were installed in the U.S., in first-quarter 2017 to reach 44.7 GW of total installed capacity, enough to power 8.7 million American homes. Moreover, the industry is forecasted to nearly triple over the next five years, surpassing 100 GW nationwide, according to the U.S. Energy Department.

Naturally, other utilities like Xcel Energy Inc. (XEL - Free Report) and Westar Energy, Inc. are also expanding base in solar power production to triumph in the long run, which can pose stiff competition to Duke Energy.

Price Movement

Duke Energy has outperformed the Zacks categorized Utility- Electric Power industry in the last 12 months. The company’s shares gained 2.7% compared with the industry’s increase of 0.5%.



Duke Energy’s strong focus on core domestic regulated and highly-contracted renewable business has augured well for its stable financial position and streamlined portfolio, which can primarily be attributed for this outperformance.

Zacks Rank

Duke Energy currently carries a Zacks Rank #2 (Buy). Investors can also consider another top-ranked stock, Atlantica Yield PLC which sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Atlantica Yield reported an earnings surprise of 36.84% in the last quarter. Its current year estimates increased by 21.6% to 62 cents in the last 90 days.

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