Strong regulated utilities combined with long-term contracted renewable energy generation: That’s the NextEra Energy (NYSE: NEE) business model. And not only does the formula work well, it’s become quite popular with investors.
Elections always have consequences. They’re just rarely what investors think they will be—and almost never what’s declared beforehand in popular investment media.
Before COVID-19, renewable energy was a bona fide, red-hot global investment theme. But the prospect of a deep recession has caused many consumers to reconsider making big purchases like rooftop solar systems.
Utility stocks have picked up in 2020 where they left off in 2019. The Dow Jones Utility Average reached an all-time high of 934 this week. So long as investors crave yield, there’s a case the sector will reach higher ground - but this story also has a less savory side.
New England-based Eversource Energy (NYSE: ES) is the latest US electric utility to target zero carbon dioxide emissions, with a far more aggressive timetable than the 2050 date set by its sector peers.
These days, it seems every major US energy project is at risk to dissonant state and federal rules, regulatory delays and court challenges to permits. In fact, US energy companies might be excused for thinking America’s true energy policy is no longer “all of the above” but none.
For those who want a play on solar and energy storage, there are better choices than Tesla (NASDAQ: TSLA).
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