Exelon's (EXC) Unit Hits 1-GW for Distributed Energy Resources

Zacks Equity Research

19 June 2024 at 7:29 am·5-min read

Exelon Corporation EXC announced that its Commonwealth Edison Company (“ComEd”) unit has interconnected more than 1 gigawatt (GW) of distributed energy resources (DER) capacity to the ComEd grid. This also includes 57,780 residential rooftop solar systems.

This move is a testament to ComEd’s dedication to assisting residential, commercial, and industrial customers in fully utilizing solar energy, as well as its advancements in the adoption of distributed energy resources.

With more than 59,000 DER, the ComEd smart grid features 1,582 commercial systems, 118 community solar projects, 23 industrial facilities and two utility-scale projects. This positions Illinois as the leading state in the Midwest for DER and the second in terms of overall capacity, as reported by the Solar Energy Industry Association.

Benefits for the Company

ComEd has provided support for 114% annual increase in residential DER and 25% annual growth in C&I DER over the last five years. Community solar has grown more than 4,000% since the first project was placed into service in the ComEd service territory in 2019.

The unit has completed 5,073 systems totaling 95.76 MW of capacity through May 2024, and received a record number of 8,273 new interconnection applications. These numbers show the benefits of climate legislation in Illinois as well as the growing interest of consumers in controlling their energy bills and lowering their carbon footprint with solar energy.

ComEd projects DER capacity to rise to more than 1,900 MW by 2025 and over 3,600 MW by 2030, almost equivalent to the electricity used to power 120,000 homes for a year. By the year's end, ComEd anticipates that more than 150 community solar projects will be linked to its distribution system, serving nearly 40,000 customers.

These initiatives can help the company to eventually lower the cost of operations by focusing on new technologies. The possibility of providing more reliable services and new customer additions should generate more revenues for the company.

Focus on Emission Reduction

The multi-year grid and rate plans that ComEd filed with the Illinois Commerce Commission outline the proposed investments required to support this rapid expansion of renewable energy and help ensure equitable access to the benefits of clean energy under the Climate and Equitable Jobs Act.

These strategies are in line with ComEd 2030, the utility's vision for a future powered by carbon-free energy that will serve all communities and adapt to customers' evolving demands over the next ten years and beyond.

Exelon is focused on its goal to reduce its operations-driven emissions by 50% within 2030 and achieve net-zero operations by 2050.

Renewable Energy Generation is on the Rise

Per the U.S. Energy Information Administration (EIA), the annual share of U.S. electricity generation from renewable energy sources should be 23% and 25% in 2024 and 2025, respectively. The largest source of increase in power generation is coming from renewable energy sources, with solar alone accounting for more than 70% of the increase in U.S. generation. EIA also expects the U.S. electric power sector to use solar energy to produce 5% of all U.S. generation in 2024 and 7% in 2025.

Along with EXC, some other electric power industry companies like Xcel Energy Inc. XEL, NextEra Energy, Inc. NEE and Dominion Energy, Inc. D are also adopting measures to meet clean-energy targets.

Xcel Energy aims to lower emissions by at least 80% within 2030 and achieve carbon neutrality by 2050. In February 2024, NSP filed its Upper Midwest Resource Plan with the MPUC that includes 3,600 MW of new wind and solar resources, 600 MW of battery energy storage and more than 2,200 MW of dispatchable resources by 2030. This should help reduce carbon emissions by more than 80%, potentially up to 88%, within 2030.

XEL’s long-term (three- to-five year) earnings growth rate is 6.4%. The Zacks Consensus Estimate for 2024 EPS indicates a year-over-year increase of 6.3%.

NextEra Energy is aiming to reduce total carbon emissions by 67% within 2025 from the 2005 level. During the first quarter of 2024, it placed into service nearly 1,640 MW of new, cost-effective solar projects in operation and expanded its contracted renewables backlog by adding 2,765 MW of renewable projects. It expects to add 33-42 GW of new renewables to the generation portfolio via clean energy investments in the 2023-2026 period.

NEE’s long-term earnings growth rate is 8.6%. The Zacks Consensus Estimate for 2024 EPS indicates a year-over-year increase of 7.3%.

D aims to cut emissions by 70-80% within 2035 from the 2005 level. Its long-term objective is to add 24 GW of battery storage, solar, hydro and wind (offshore as well as onshore) projects by 2036 and increase the renewable energy capacity by more than 15% per year, on average, over the next 15 years.

D’s long-term earnings growth rate is 13.6%. The Zacks Consensus Estimate for 2024 EPS indicates a year-over-year increase of 38.2%.

Price Performance

In the past six months, shares of EXC have risen 0.2% against the industry’s 2% decline.

Image Source: Zacks Investment Research

Zacks Rank

EXC currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Benefits for the Company

Focus on Emission Reduction

Renewable Energy Generation is on the Rise

Price Performance

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