NRG Energy Unit Builds Solar Array in Rutland - Analyst Blog

NRG Energy, Inc. NRG continues to pursue solar energy-focused initiatives. NRG Residential Solar Solutions, a subsidiary of NRG Energy, announced that it has constructed a community solar array (“CSA”) in Rutland, VT, under its Vermont Community Solar Project.

NRG Energy will sell the output from the 150-kilowatt KW solar farm to 50 customers of Green Mountain Power Corporation (“GMP”), who signed for the project.

Colchester, VT-based GMP generates, transmits, distributes and sells electricity to over 250,000 customers in Vermont.

The project will create a win-win situation for all the parties associated with it, including the customers, NRG Energy and GMP.

The customers will not be entitled for any upfront costs related to the aforesaid project. In addition, NRG Energy will provide solar panels installation services as well as other infrastructure needs. The customers will also enjoy a credit on the GMP bills for the power generated from the CSA.

We believe the aforesaid positives will encourage other customers to empanel themselves with the project, thereby improving NRG Energy's performance going forward. NRG Energy plans to start a second project in Rutland, which will enable the company to provide reliable services to customers besides meeting the rising utility demand. These initiatives will help NRG Energy to fulfill government mandates for power generation through the renewable sources.

GMP is also benefited from the project in terms of achieving the state of Vermont's renewable energy goal. GMP plans to work together with NRG Energy to construct more solar operations in Vermont.

It is evident from past records that NRG Energy is currently focusing more on the expansion of renewable properties. The company's recent acquisitions of the assets of Edison Mission Energy, a subsidiary of Edison International EIX, and Roof Diagnostics Solar will support its renewable asset expansion program.

On May 7, 2014, NRG Energy and Unilever United States, Inc., a unit of Unilever plc UL, announced that they will form a strategic partnership. The agreement will enable Unilever to utilize 100% clean energy for its energy requirements at its U.S. sites by 2020.

We believe that addition of renewable assets besides inking long-term power supply contracts will enable NRG Energy to secure stable cash inflows going forward.

NRG Energy currently has a Zacks Rank #1 (Strong Buy). Another stock looking equally good in the utilities industry is American Electric Power Co., Inc. AEP, carrying the same rank as NRG Energy.

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