Exelon Corporation’s (EXC) Constellation business unit announced that the company has completed its 16.1 megawatt (“MW”) power grid-connected photovoltaic (“PV”) solar facility in Emmitsburg, Maryland. The company has spent approximately $50 million for this project. Exelon expects this facility to generate more than 20 million kilowatt hours (“KWh”) of emissions-free electricity annually.
The electricity generated from this solar plant will be sold to the state’s Department of General Services and the University System of Maryland under the 20-year solar power purchase agreements (“PPA”).
The company has installed this plant under the Generating Clean Horizons initiative of the state of Maryland. The Generating Clean Horizons initiative is a partnership between the state of Maryland and the University of Maryland, formed in February 2009. The main objective of this initiative is to encourage large-scale commercial renewable energy projects in the region for creating more green jobs.
First Solar, Inc. (FSLR) developed this ground-mounted solar power plant, utilizing approximately 220,000 of its advanced thin film PV panels. This project site is situated on 100 acres of land leased by Exelon from Mount St. Mary’s University.
Moreover, this 16.1 MW power grid-connected PV solar project facility will produce clean and renewable electricity while reducing the fear of harmful air emissions and waste production.
According to the U.S. Environmental Protection Agency (“EPA”) records, this project is likely to displace yearly carbon dioxide emissions by approximately 17,981 metric tons. This project not only takes the company closer to its carbon emission goals, but also enables to provide customers clean and affordable energy.
Currently, Exelon has approximately 112 MW of solar installations, which includes 25 MW in Maryland. We believe the addition of this PV portfolio expands Exelon’s coverage in the Maryland solar energy market. Since Exelon has 20-year PPA, it is likely to generate steady revenue in the near term.
We believe Exelon’s continuous effort toward expansion of its solar portfolio will create a win-win situation for each of the parties, including consumers and the government. As a result of power purchase or solar services agreements, the company offers solar installations without upfront capital investments from the customers and tries to provide fixed power costs that are lower than the market rates.
In addition, these green projects also create new jobs, which are expected to subsequently minimize the unemployment level. At the same time, the company will likely secure steady cash flow from its operations.
However, we are skeptical about the effects of volatile weather patterns, rising long-term interest rates and higher operating costs, which might challenge Exelon’s future performance.
Chicago, Illinois-based Exelon Corporation, a utility services holding company, engages in the generation, transmission, distribution and sale of electricity to residential, commercial, industrial and wholesale customers. Exelon Corporation currently retains a Zacks #3 Rank, which translates into a short-term Hold rating.
More From Zacks.com