NextEra Energy Partners plans to increase U.S. solar holdings


With an improved mid-term outlook for solar on the back on extension of the Investment Tax Credit (ITC) and as solar and wind yieldco stock prices recover from a tough year, at least one yieldco is making plans to dramatically increase its solar holdings.

In a presentation accompanying its recently released Q2 results, NextEra Energy Partners (NEP) has announced that it is planning to acquire 269-1,169 MW of U.S. solar assets in the 2017-2018 timeframe, which will bring its total solar holdings to 400 MW to 1.3 GW.

NEP currently has 445 MW of U.S. wind projects under contract, and is planning to repower another two wind projects totaling 327 MW by the end of 2017, but only 131 MW of solar PV assets. This puts the company’s total at 903 MW of renewables (including repowering projects).

NEP says that policy certainty due to extension of the federal Investment Tax Credit (ITC) last December makes this the right time to plan to pick up solar projects.

“Overall, the added planning stability provided by tax incentives are expected to serve as a bridge to further equipment cost declines and efficiency improvements that should enable renewables to compete on a levelized cost of energy basis with gas-fired technology when tax incentives are ultimately “phased-down,” stated NextEra Executive VP and Chief Financial Officer John Ketchum on the company’s quarterly earnings call.

NEP is also planning big acquisitions in wind, which are likewise supported by extension of the U.S. production tax credit. NEP plans to acquire an additional 1,955-3,355 MW of U.S. wind and 0-300 MW of Canadian wind in the 2017-2018 timeframe, to bring its wind holdings to 2.4 – 4.1 GW.

This optimistic forecast comes on the back of strong quarterly results. NextEra Energy Partners grew revenues 37% year-over-year, with a net income of $28 million. NEP grew per-unit distributions 40% over Q2 2015.

NEP’s acquisitions have already begun, with the company picking up 285 MW of wind projects in July, after the close of the 2nd quarter.

NEP is not the only NextEra company planning to expand. NextEra Energy Resources, the Independent Power Production arm of NextEra is planning to put online 2.5 GW of “new contracted renewables” by the end of 2016, which will put NEP and Energy Resources’ combined renewables portfolio at 16 GW.

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