• Twitter
Generic selectors
Exact matches only
Search in title
Search in content
Post Type Selectors

Executive Summary

A New Upside Driver for Utilities

By Roger S. Conrad on Apr. 5, 2015

Erratic economic growth and sinking energy prices have made investment in solar power an unexpected upside catalyst for US electric utilities’ earnings growth.

Two days after closing the sale of its remaining gas- and coal-fired merchant plants, Duke Energy Corp (NYSE: DUK) announced plans to install 500 megawatts of solar power in Florida.

This announcement followed on the heels of Duke Energy investing $225 million in REC Solar Commercial Corp—a deal that made the North Carolina-based utility an instant player in distributed electricity. The company also plans to roll out 720 megawatts of solar-power capacity in the Carolinas.

Dominion Resources (NYSE: D) owns almost 25 gigawatts of nuclear and thermal power plants and operates more than 33,000 of natural gas pipelines. The utility has 400 megawatts of solar-power capacity under development in Virginia and another 744 megawatts across seven other states.

Meanwhile, Sempra Energy (NYSE: SRE) and Southern Company (NYSE: SO) reportedly have contemplated forming yieldcos to finance their renewable-energy plans.

NextEra Energy (NYSE: NEE), the nation’s leading producer of wind and solar energy, demonstrated the appeal of this structure with the market’s reception of NextEra Energy Partners LP (NYSE: NEP).

For the same investment, utility-scale solar-power plants produce more than four times the electricity output by residential rooftop systems and twice as much as commercial distributed generation. Utilities’ existing customer relationships also give them a huge leg up in marketing rooftop solar-power systems.

These realities put money-losing SolarCity Corp (NSDQ: SCTY), Vivint Solar (NYSE: VSLR) and other would-be usurpers at a huge competitive disadvantage. But the growth opportunity in solar power is great news for a utility sector contending with slackening electricity demand and pushback on rate increases.

Read more about these risks and opportunities in my Special Report, Renewable Energy: How to Make Green and Avoid Red.

Conrad's Utility Investor

Invest Smarter! Join Conrad’s Utility Investor!

What sets renowned income-investing expert Roger Conrad apart from the pretenders? His more than two decades of covering utility stocks and essential services—a wealth of knowledge and experience that you can’t find anywhere else.   

Smart investing. Taking advantage of real opportunities and not fads (and knowing the difference). Finding the companies and stocks that will deliver for the long haul, so investing lets you live instead of investing turning into your life. Roger Conrad has dedicated his career to these principles—and that’s what Conrad's Utility Investor delivers.

Subscribe today for instant access to a treasure trove of investment insight and knowledge, as well as Roger’s exclusive model Portfolios and ratings of more than 200 essential services.



Roger S. Conrad needs no introduction to individual and professional investors, many of whom have profited from his decades of experience uncovering the best dividend-paying stocks for accumulating sustainable wealth. Roger b