Elections always have consequences. They’re just rarely what investors think they will be—and almost never what’s declared beforehand in popular investment media.
Before COVID-19, renewable energy was a bona fide, red-hot global investment theme. But the prospect of a deep recession has caused many consumers to reconsider making big purchases like rooftop solar systems.
Utility stocks have picked up in 2020 where they left off in 2019. The Dow Jones Utility Average reached an all-time high of 934 this week. So long as investors crave yield, there’s a case the sector will reach higher ground - but this story also has a less savory side.
New England-based Eversource Energy (NYSE: ES) is the latest US electric utility to target zero carbon dioxide emissions, with a far more aggressive timetable than the 2050 date set by its sector peers.
These days, it seems every major US energy project is at risk to dissonant state and federal rules, regulatory delays and court challenges to permits. In fact, US energy companies might be excused for thinking America’s true energy policy is no longer “all of the above” but none.
For those who want a play on solar and energy storage, there are better choices than Tesla (NASDAQ: TSLA).
Xcel Energy’s (NYSE: XEL) electric utility territory stretches from Minnesota to Texas, running through high-growth Colorado. And with nearly $12 billion in annual revenue and $31 billion market capitalization, its strategic moves are always significant. But getting there depends on more wind power deployment. For that, Xcel will rely on NextEra Energy (NYSE: NEE), its biggest supplier and the leading US producer of wind and solar.
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