NEP - NextEra Energy Partners: Lower Solar Panel Prices May Offset Higher Borrowing Costs Improving Growth Outlook
2024-05-29 16:35:51 ET
Summary
- Investor appetite for clean energy stocks appears poor despite rapid growth in the sector following a broad decline in solar stocks.
- Solar and wind energy have lower costs per MWH than fossil fuel power plants but are more exposed to interest rates because they have higher upfront capital costs.
- NextEra Energy Partners is facing challenges due to high borrowing costs, but its business model remains profitable and offers a high dividend yield.
- The solar panel glut may be a positive catalyst for the firm, as it could offset higher borrowing costs with lower capital investment costs.
- The company's CFO may decline as it refinances its debt, but not so much that its dividend is at high risk of being cut.
The alternative energy market is rapidly changing as governments worldwide look to accelerate the transition to sustainable energy. During most of the 2010s, "green energy" stocks usually traded at a significant premium as investors looked to the growth opportunity or wanted to invest based on some social aim....
NextEra Energy Partners: Lower Solar Panel Prices May Offset Higher Borrowing Costs, Improving Growth Outlook