Clearway Energy CWEN announced that it has started the construction of standalone solar and energy storage projects in Hopkins County, TX. This announcement comes after the completion of the projects financing.

The company announced that a $665 million investment had been made in the 200-megawatt (MW) Pine Forest storage and 300-MW Pine Forest solar facilities. The energy storage system is designed to provide grid flexibility by storing excess power and delivering it during periods of high demand for electricity. The commercial operation of the projects is expected in 2025.

Under a long-term virtual power purchase agreement, Dell Technologies has committed to acquire a large portion of the solar project’s electricity, claiming that this will help the company achieve its climate goals. A deal to offtake a portion of the solar project’s power has also been signed with Universal Corp., which is a supplier of agricultural products.

According to Dell, Pine Forest is anticipated to supply enough renewable energy to cover the majority of the company’s power requirements in the United States. The company also noted that this corresponds with the group’s worldwide sustainability objective of obtaining 75% of its electricity by 2030 and 100% by 2040 from renewable sources.

Clearway Strengthens Its Renewable Portfolio

Clearway is making strategic acquisitions and partnerships to further expand its renewable operations. In May 2024, CWEN committed to acquire a 50% cash equity interest in the Rosamond South I solar plus storage project, a 257 MW project located in Rosamond, CA, for nearly $21 million in cash. Clearway completed a joint development agreement for battery development adjacent to CWEN’s Utah solar assets, with the potential to invest up to $85 million at a 10% cash available for distribution yield in 2026.

A few months back, the company committed to acquire a 50% cash equity interest in the Dan’s Mountain wind project, a 55 MW project located in Allegany County, MD, for $44 million in cash. The project is expected to sell its power primarily under a 12-year power purchase agreement.

By 2035, 95% of the electricity the company generates will be carbon-free, and by 2050, CWEN will achieve net-zero Scope 1 and 2 GHG emissions. Clearway Group has a 30-gigawatt (GW) development pipeline that is expected to continue to add renewable assets to CWEN’s portfolio over time, thereby further reducing its carbon intensity.

Other Companies’ Focus on Clean Energy

Per the U.S. Energy Information Administration (“EIA”), the annual share of U.S. electricity generation from renewable energy sources is expected to be 23% and 25% in 2024 and 2025, respectively. EIA also expects an increase of 37% in solar power (60 billion kilowatt hours) this year. Solar accounted for 59% of U.S. generating capacity additions in the first half of 2024 due to the development of new battery storage capacity.

Along with CWEN, some other utility companies like FirstEnergy Corp. FE, Duke Energy DUK and Alliant Energy LNT are also set to take advantage of the expanding solar energy market.

In September 2024, FE’s subsidiaries, Mon Power and Potomac Edison, initiated construction on the third utility-scale solar site in West Virginia. The solar farm is expected to generate up to 5.75 MW of renewable energy. It is part of five solar projects that will generate a total of 50 MW of renewable solar energy.

FE’s long-term (three-to-five-year) earnings growth rate is 7.04%. The Zacks Consensus Estimate for 2024 earnings per share (EPS) indicates a year-over-year increase of 5.5%.

DUK currently operates 1.2 GW of solar energy in Florida, with plans to continue adding nearly 300 MW in 2024. With this, the company remains on track to bring 1.5 GW of utility-owned solar in service by 2024-end. It has filed a multi-year rate plan for 1.05 GW of new solar additions during 2025-2027.

DUK’s long-term earnings growth rate is 6.1%. The Zacks Consensus Estimate for 2024 EPS indicates a year-over-year increase of 7.4%.

Alliant Energy is almost done with its final solar project in Wisconsin, which will complete its 1.1- GW solar investment in the state and provide its consumers with long-term value. The completion of this investment solidifies its position as the largest owner-operator of solar generation in Wisconsin.

LNT’s long-term earnings growth rate is 6.84%. The Zacks Consensus Estimate for 2024 EPS indicates a year-over-year increase of 8.2%.

CWEN’s Stock Price Performance

In the past three months, shares of CWEN have risen 22.2% compared with the industry’s 18.7% growth.

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CWEN’s Zacks Rank

The company currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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