Duke Energy (DUK) Unveils Kentucky's Biggest Rooftop Solar Farm
Duke Energy Corp. DUK recently unveiled Kentucky's largest rooftop solar facility with a generation capacity of up to 2 megawatts (MWs). It operates on the top of the 800,000-square-foot Amazon Air Hub. The solar project, built as part of a joint partnership between Amazon and Duke Energy, should bolster both companies’ clean energy goals.
With the entire utility sector rapidly adopting renewables as their preferred energy source, the latest revelation is likely to lead more customers to choose DUK as their electricity provider, boosting its future revenues.
DUK’s Transition to Renewable Energy
Like other utilities, Duke Energy boasts a prudent strategy to enhance its clean energy portfolio. The company plans to achieve net-zero emissions from electricity generation by 2050. Notably, DUK’s capital expenditure plan includes investments worth $40 billion for zero-carbon generation, such as solar, wind and battery storage resources, and extending the life of its nuclear fleet over the next decade. It also plans to bring 3,100 MW of new solar in service by 2028.
To promote renewable energy further, the company is targeting the energy generated from coal to represent less than 5% of the total generation by 2030 and exit coal fully by 2035 as part of the largest planned coal fleet retirement in the industry. Such initiatives, including the unveiling of the latest solar plant in Kentucky, will enable DUK to duly meet its target in 2050.
Growth Prospects
Solar Energy continues to constitute a major portion of the U.S. renewables market. As stated by Wood Mackenzie in its latest report, solar constituted 54% of the new electricity-generating capacity additions in the nation in the first quarter of 2023, outweighing all other energy sources. Per the Solar Energy Industries Association report, the solar market is projected to triple in size over the next five years.
This should benefit Duke Energy and other prominent utility players like Alliant Energy Corp. LNT, PPL Corp. PPL and Pinnacle West Capital Corp. PNW, which are enhancing their footprint in the U.S. solar market.
Alliant Energy is on track to be the fourth largest owner-operator of regulated solar in the United States by 2024. The company plans to add 1.5 GW of solar in 2022-2024. 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 (three- to five-year) earnings growth rate is 6.5%. The Zacks Consensus Estimate for its 2023 sales indicates an increase of 8% over 2022’s reported figure.
In December 2022, PPL Corp.’s subsidiary Louisville Gas and Electric Company and Kentucky Utilities Company filed with the Kentucky Public Service Commission to approve adding nearly 1,000 MWs of solar generation and 125 MWs of battery storage.
PPL’s long-term earnings growth rate is 7.4%. The stock boasts a four-quarter average earnings surprise of 3.14%.
Pinnacle West Capital is expecting to invest $1.34 billion in clean power generation during 2023-2025. At the end of 2022, its principal subsidiary, Arizona Public Service, had a diverse portfolio of 2,418 MW in operation and 1,476 MW under development, including solar, wind, geothermal, biomass and biogas.
PNW’s long-term earnings growth rate is 6.3%. The Zacks Consensus Estimate for its 2023 sales indicates an increase of 2.1% over 2022’s reported figure.
Price Performance
In the past month, shares of DUK have lost 1.6 % against the industry’s 0.6% 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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