sPower, a joint venture between The AES Corporation (AES - Free Report) and the Alberta Investment Management Corporation, is set to start commercial operation at its Antelope DSR 3 solar project. The electricity, expected to be generated by this 20-Megawatt (MW) AC project at full capacity, can light up to 7,300 average homes in California.
The project, located in California, will provide energy to Edison International’s (EIX - Free Report) subsidiary — Southern California Edison (SCE) — under a long-term power purchase agreement.
AES Corp’s Focus on Renewable
With increasing demand for renewables, AES Corp intends to extend its renewable footprint substantially. In this regard, it is imperative to mention that the company signed long-term contracts for 525 MW of renewable capacity during the second quarter of 2019, increasing its backlog to 6,764 MW.
This includes a 219 MW of solar capacity at AES Distributed Energy, with commercial and industrial customers in the United States, a 175 MW of solar capacity at sPower with a utility in the United States and 100 MW of energy storage with a domestic utility. Such developments should fortify AES Corp’s position in the U.S. renewable space.
In addition to the aforementioned developments, the latest news of the Antelope solar project’s completion should further boost the company’s renewable portfolio.
Solar Prospect in the United States
Factors like declining cost of solar module, rapid technology advancements leading to improved solar cell efficiency and optimistic policy developments undertaken by states’ governments have been bolstering the U.S. solar market. This has led to noticeably improvement in solar installations across the country over the past few months.
This upbeat installation trend in the solar market coupled with unexpected rapid growth in Florida and Texas boosted U.S. solar market projections. Wood Mackenzie Power & Renewables now expects more than 13 GW of solar capacity additions in 2019, indicating 25% growth year over year.
To reap the benefits of America’s expanding solar market opportunities, other utilities like AES Corp are also fortifying their solar footprint. Evidently, DTE Energy (DTE - Free Report) offered open bidding for renewable developers to participate in new solar and wind projects of Michigan in September.
In April, WEC Energy Group, Inc. (WEC - Free Report) received approval from the Public Service Commission of Wisconsin for two solar projects, with total capacity of 450 MW.
Such developments indicate increased solar adoption across the United States, offering AES Corp enough opportunities to increase its solar portfolio here.
In a year’s time, AES Corp has gained 4.9% compared with the industry’s 13% rally.
AES Crop currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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