Electric and natural gas provider Xcel Energy Inc. (XEL) and solar cell manufacturer SunPower Corporation (SPWR) have decided to extend their ties by developing yet another solar photovoltaic (PV.V) plant in Colorado. Per the agreement, these companies will develop a 50-megawatt solar PV power plant in Colorado's San Luis Valley.
Earlier, these companies had jointly developed a 19 MW Greater Sandhill plant in operation since 2010 and a 30 MW San Luis Valley Solar Ranch operational since 2011. Xcel Energy’s sustained efforts to boost its green generation basket will help meet the state of Colorado’s renewable energy standard of 30% by 2020.
In fact, the power generated from this new solar plant will be slightly more than the combined production from the two solar power units mentioned above. SunPower – a subsidiary of TOTAL S.A. (TOT) – will start construction from 2015. The new plant will come online in 2016. The expected total power generation from these three solar plants will be capable of providing electricity to 26,500 Colorado homes.
For the project, SunPower will design and build a SunPower Oasis Power Plant system. Once online, this new solar unit will offset almost 127,000 tons of carbon dioxide emissions and contribute towards a greener environment.
Xcel Energy presently has about 80 MW of utility-scale solar and approximately 188 MW of customer-sited solar generation in Colorado. In 2013, Colorado Public Utility Commission granted permission to Xcel Energy to add more solar power to its portfolio. The commission approved an addition of 170 MW of utility-scale solar generation through power purchase agreements.
Xcel Energy, a Zacks Rank #3 (Hold) stock, reported earnings of 52 cents in the first quarter of 2014, surpassing the Zacks Consensus Estimate by 4%. The company reiterated its 2014 earnings guidance in the range of $1.90 to $2.05 per share. The Zacks Consensus Estimate is pegged at $1.99 per share, near the midpoint of the guidance range. Investors interested in utility space may consider NRG Energy, Inc. (NRG), which carries a Zacks Rank #1(Strong Buy).