Duke Energy (DUK) Signs 199MW Solar Power Deal in Indiana
Duke Energy Corp. DUK recently signed a 20-year power purchase agreement (PPA) with Ranger Power to buy up to 199 megawatts (MW) of solar energy from the latter’s Speedway Solar plant. This initiative, which can serve almost 35,000 households in Indiana, will increase DUK’s solar energy capacity in Hoosier State.
The PPA request is currently awaiting regulatory approval from the Indiana Utility Regulatory Commission, with electricity generation expected to commence by September 2025 from the solar project.
DUK’s Indiana Integrated Resource Plan
The Integrated Resource Plan is a 20-year forecast on outlines to serve existing and future customers in a reliable and economical manner.
Under this plan, Duke Energy plans to reduce carbon emissions from its Indiana fleet by 60% in 2030 and 90% by 2040 from the 2005 levels. It will increase wind generation by 6,200 MW, solar power by 2,218 MW and solar power with energy storage by 450 MW.
Such renewable energy initiatives, including the latest PPA signed with Ranger Power, will enable DUK to duly meet its clean energy target in Indiana state.
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 17.32% during 2022-2027, reaching a solar installed capacity of 270 GW by 2027 from 96.19 GW in 2020.
This should benefit Duke Energy and other utility players like Consolidated Edison Inc. ED, Entergy Corp. ETR and Alliant Energy Corp. LNT, which are enhancing their footprint in the U.S. solar market.
Consolidated Edison made roughly 24MW of customer-owned solar installations in the first quarter of 2023. As of June 2023, it had installed 58,000 solar systems totaling more than 530 MW of capacity in New York.
ED’s long-term (three- to five-year) earnings growth rate is 2%. The stock boasts a four-quarter average earnings surprise of 9.51%.
Entergy’s subsidiary, Entergy Louisiana, filed a request with the Louisiana Public Service Commission in March 2023 to approve the purchase, construction and operation of nearly 225 MW of new solar power resources. During the same month, it filed another request to add another 3 GW of solar power to its generation portfolio.
ETR’s long-term earnings growth rate is 5.7%. The stock boasts a four-quarter average earnings surprise of 7.53%.
Alliant Energy plans to add almost 1,500 MW of solar energy generation by the end of 2024. In March 2023, LNT entered into a partnership with Marshalltown YMCA-YWCA to break ground on a 500-kilowatt solar project to be built on donated land in Marshalltown.
LNT’s long-term earnings growth rate is 6.5%. The Zacks Consensus Estimate for its 2023 sales indicates an increase of 8% from 2022’s reported figure.
Price Performance
In the past month, shares of DUK have gained 2.6 % compared with the industry’s 0.3% increase.
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Zacks Rank
Duke Energy currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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