Avangrid (AGR) Unveils its First California Solar Project
Avangrid Inc. AGR recently announced that it will construct the Camino Solar Project, its first photovoltaic solar project in California, where the company currently has six wind energy facilities in operation, producing more than 500 megawatts (MW).
The 57 MW Direct Current (MWdc) project, with more than 105,000 panels, will be constructed by Cupertino Electric, Inc. in Kern County, adjacent to Avangrid’s 189 MW Manzana Wind farm. This will generate enough electricity to take more than 20,000 cars off the road. The project’s commercial operation is anticipated in 2025.
Focus on Renewables
Avangrid plans to achieve carbon neutrality by 2035. Currently, the company operates 75 wind and solar facilities, producing 8.7 gigawatts (GW) of renewable energy.
Avangrid’s renewable projects are presently in the process of development, which will add 408 MW of solar and 912 MW of wind, boosting the company's clean energy generation capacity.
Growth Prospects
With the United States being one of the major forerunners in the global transition toward clean energy, solar power continues to constitute a significant portion of the rapidly expanding U.S. renewables market. Per a Mordor Intelligence report, the U.S. solar energy market is expected to record a CAGR of 16.48% during 2023-2028, reaching a solar installed capacity of 352 GW by 2028.
This should benefit Avangrid and other utility players like NextEra Energy Inc. NEE, DTE Energy Co. DTE and Pinnacle West Capital Corp. PNW, which are enhancing their footprint in the U.S. solar market.
NextEra plans to add 33-42 GW of new renewables during the time period 2023-2026. Its subsidiary Florida Power & Light Company plans to add in excess of 20,000 MW of cost-effective solar capacity to its portfolio.
NEE’s long-term (three- to five-year) earnings growth rate is 8.4%. The Zacks Consensus Estimate for its 2023 sales indicates an increase of 29.5% over 2022’s reported figure.
DTE Energy has a capital investment of $11 billion planned over the next 10 years for clean energy transition. The company intends to develop 1,830 MW of energy storage, 6,500 MW of solar and 8,900 MW of wind by 2042. The company also plans to convert the two units at the Belle River facility from a base load coal plant to a 1,300 MW natural gas peaking resource in 2025-2026.
DTE’s long-term earnings growth rate is 6%. The stock boasts a four-quarter average earnings surprise of 4.07%.
Pinnacle West Capital expects to invest $1.34 billion in clean power generation during 2023-2025. Currently, 1,425 MW of solar power is under long-term PPAs, to be operational by 2025.
PNW’s long-term earnings growth rate is 6.5%. The Zacks Consensus Estimate for its 2023 sales indicates an increase of 4.7% over 2022’s reported figure.
Price Performance
Over the past month, shares of AGR have lost 10.1% compared with the industry’s decline of 9.3%.
Image Source: Zacks Investment Research
Zacks Rank
Avangrid currently has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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NextEra Energy, Inc. (NEE) : Free Stock Analysis Report
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