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Exelon Unit Provides 2013 Solar Update

Zacks Equity Research

Exelon Corporation's (EXC) business unit, Constellation Energy Resources, LLC, has reported its 2013 solar portfolio update. In 2013, Constellation added 38 megawatts (“MW”) of customer-sited solar generation to its portfolio, which now totals over 164 MW of solar generation either in operation or under construction phase for commercial, industrial and public sector consumers.
Constellation supplies power, natural gas and energy products and services to U.S homes and businesses. The company’s wide array of energy products and services include solar, energy efficiency, load response, and building and home services. Constellation currently has 58 projects and 177 installations in 10 states and the District of Columbia, which are either completed or underway.

We note that Exelon generates approximately 55% of electricity from nuclear powered units. Though the company maintains necessary safety measures, nuclear power generation has been a debatable issue worldwide since the nuclear disaster in Japan.

To diversify generation portfolio and reduce risks related to accidents in nuclear facilities, Exelon is currently venturing more into environment-friendly power projects. Currently, approximately 10% of the company’s total production comes from renewable sources with the ratio rising gradually.

Currently, utilization of renewable energy is increasing primarily due to its clean nature and a growing awareness among the masses regarding its benefits. These influence utility providers to shift their mode of power generation to solar, wind and water.

Apart from Exelon, its peers ALLETE, Inc. (ALE), Wisconsin Energy Corporation (WEC) and Sempra Energy (SRE) are investing substantially to develop and upgrade their renewable utility assets to comply with stringent regulations.

We remind investors that Exelon receives power supply orders from several government and private establishments at regular intervals. In Nov 2013, the company entered into a power supply agreement with the City of Chicago. We believe inking long-term power supply agreements on a regular basis will enable Exelon to secure a stable revenue stream going forward. A steady cash inflow will also support the company to invest more in new projects.

Chicago-based Exelon currently has a Zacks Rank #2 (Buy).

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