Duke Energy Corp. (DUK) took over the largest solar generation facility in San Francisco – the Sunset Reservoir Solar Power Project – from Recurrent Energy. However, the financial terms of the transaction were not disclosed.
With a capacity of 4.5 megawatt (AC) this solar power system consists of almost 24,000 solar panels mounted on top of the Sunset Reservoir. The plant was developed and operated by Recurrent Energy since 2010.
The power generated from the solar farm will be sold to the San Francisco Public Utilities Commission for at least the next 25 years.
This acquisition enables Duke Energy to expand its solar footprint in California and also reveals the constant inroads of solar into mainstream power generation. By 2020, the state is committed to generate 33% of the electricity from sources like wind, solar, geothermal, biomass, and small hydroelectric facilities. The acquisition comes four months after Duke Energy Renewables bought two commercial solar power projects, namely, Highlander Solar 1 and 2, for an undisclosed amount from SolarWorld.
Located near Twentynine Palms, Calif., both the projects will run as a single operation as it is located almost next to each other. Together, Highlander Solar 1 and 2 will generate 21 megawatts (MW) of renewable energy, which is sufficient to power more than 4,000 average homes every year. Under a 20-year purchase power agreement, all the electricity generated from the two projects will be sold to Edison International (EIX).
Currently, Duke Energy Renewables has more than 100 MW of solar generating capacity from 16 various farms. Since 2007, Duke Energy has invested more than $3 billion to grow its commercial wind and solar business.
Recently, the utility’s adjusted second quarter 2013 earnings came in below our expectation and were also below the year-ago figure by 14.7%. The lower numbers mainly reflect higher costs and the impact of share dilution from the Progress Energy merger and lower quarterly results at both the Commercial Power and International Energy business units.
The company presently retains a short-term Zacks Rank #3 (Hold). Others stocks worth considering in the space include Zacks Ranked #1 (Strong Buy) Huaneng Power International, Inc. (HNP) and Zacks Ranked #2 (Buy) Alliant Energy Corp. (LNT).
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