NRG Set to Ramp Solar Portfolio - Analyst Blog

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NRG Energy, Inc. 's ( NRG ) subsidiary, NRG Solar LLC is on its way to expand its solar power generation portfolio. The company plans to develop projects, with a capacity of over 11 megawatt ( MW ), in collaboration with PsomasFMG LLC. The deal comprises a 7.3 MW project at William S. Hart School District in Santa Clarita, California and another project with a capacity of 3.3 MW in the County of Orange, California.

NRG will be in charge of the financial resources and raw materials, primarily power inverters and solar panels. On the other hand, PsomasFMG will provide support in terms of the design and construction of the project.

After completion of this project, the companies will sell solar-generated electricity to the facility owners who sign the power purchase agreements. The revenue-sharing will be done on the basis of individual contributions for each project.

In November 2011, NRG and SunPower Corporation ( SPWR ) began the construction of a 250-megawatt project at California Valley Solar Ranch. During the 2-year construction period, the project is expected to create 350 jobs and inject $315 million in the local economy.

During NRG's earnings conference call, the company announced its plans to allocate approximately $553 million for environment capital expenditure for the 2012-2016 span. The investment would be made in compliance with the government's stringent environmental rules and regulations.

Earlier, NRG acquired stakes in three Utility Scale Solar facilities namely California Valley Solar Ranch, Agua Caliente and Ivanpah for approximately $165 million as part of its efforts to capitalize on the future growth opportunities in renewables.

As of December 31, 2011, NRG reported total electricity generation of 25,135 MW, out of which 95 MW was contributed by Utility Scale Solar and Distributed Solar segments. NRG Energy is a pioneer in developing cleaner and smarter energy choices for its customers.

The company is expanding its solar energy portfolio and continues to maintain its dominance in the sustainable energy space. The company has a large-scale photovoltaic and solar thermal projects pipeline, with an approximate capacity of 2,000 MW, spread across different locations in Southwestern United States and the Western Hemisphere. The company expects the output to go up to 860 MW next year.

We expect that NRG is well positioned with a consistent cash balance and is using the same to increase shareholder value through share repurchases and expansion of its solar power generation portfolio. The company entered into several agreements to acquire solar power generation assets and distribution companies and develop solar power plants with its partners.

NRG Energy currently retains a Zacks #3 Rank, which translates into a short-term Hold rating.

Based in Princeton, New Jersey, NRG Energy Inc. operates as a wholesale power generation company. The company is also involved in the trading of fuel and transportation services, energy trading and related products in the United States and internationally.

NRG ENERGY INC ( NRG ): Free Stock Analysis Report

SUNPOWER CORP-A ( SPWR ): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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