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Microsoft, Invenergy Collaborate for Renewable Energy Project

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Microsoft (MSFT - Free Report) is collaborating with Invenergy to work on a solar project based out of Beaufort County, NC. The new 74-megawatt Wilkinson Solar Energy Center project is slated to commence operations in 2019.

Founded in 2001, Invenergy is a privately held company primarily engaged in developing sustainable energy solutions and operating storage facilities across the Americas, Asia and Europe.

Microsoft entered into a 15-year deal, by which it will be the single off-taker of the renewable energy produced by Wilkinson Solar Energy Center. The facility is anticipated to generate local investment of $20 million and estimated to create approximately 500 jobs in the course of construction.

The latest deal is in sync with the company’s strategy to promote the usage of renewable energy in a bid to keep costs under control and reduce carbon emission. In fact, Microsoft intends to achieve early 60% dependency on renewable energy for its power requirements by the end of 2020.


 

Coming to price performance, shares of Microsoft have returned 20.3% in the past year outperforming the industry’s rally of 17.2%.

Why this Move?

Cloud computing is gradually gaining traction among the masses, given the convenience and security features it provides to the end user. Per an IDC report, global public cloud services’ spending is estimated to reach $370 billion by 2022 at a CAGR of 22.5%. Per the report, public cloud services’ spending is expected to reach $210 billion in 2019, up 23.8% over 2018.

To operate a cloud infrastructure, data centers are required that in turn need a steady and unwavering power supply to function properly. Given the growing demand for cloud, demand for datacenters and power is likely to increase in the future. To meet the power requirements, many major cloud players are turning to renewable sources of energy and Microsoft is no different.

We note that dependence on renewable resources to cut down on operating costs is just another way to be more competitive and profitable, and Microsoft’s decision to do so augurs well for the company in the long run.

Microsoft’s Go Green Initiatives

Microsoft is one of the many notable companies that are undergoing significant investments in renewable energy in order to keep a check on its operating expenses along with making efforts to keep the climate clean.

It has been aggressively investing to source renewable energy for its operations. The company has set an ambitious target to fuel 100% of its global energy needs through renewable resources like solar, geothermal & wind power, biogas and hydro power.

Further, Microsoft has completed a few large-scale corporate Power Purchase Agreements (PPAs) to buy renewable energy in the United States. The new project is estimated to expand the company’s total renewable energy portfolio to approximately 1.3 gigawatts. Reportedly, Microsoft’s cloud platform Azure “has been carbon-neutral since 2012”.

Other companies like Apple (AAPL - Free Report) , Alphabet (GOOGL - Free Report) , Amazon (AMZN - Free Report) and Walmart, among others, are also seeking greater use of renewable energy in their operations. In fact, Apple and Alphabet owned Google have achieved 100% renewables target and are powered by green energy. Amazon Web Services (AWS) attained 50% dependency on renewable energy in January 2018, and has plans to hit 100% target in the longer haul.

Undoubtedly, going green will help big companies to save on costs and protect the environment at the same time. Moreover, it is expected to help reduce global warming and fossil fuel consumption.

Zacks Rank

Currently, Microsoft carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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