Edison International Going Solar - Analyst Blog

Edison International’s (EIX) subsidiary Southern California Edison’s (SCE) has selected Satcon Technology Corporation (SATC) to supply inverters for at least 75% of the utility’s Solar Photovoltaic Program (SPVP) Project. Satcon Technology is a leading provider of utility-scale power solutions for the renewable energy market. Edison International selected Satcon’s PowerGate Plus 500 kilowatt solution, a widely deployed utility ready solar photovoltaic inverter.

As part of the SPVP program, Edison International plans to install, own and operate up to 250 MW of solar generating capacity over the next five years, 75 MW of which are in the immediate development stage. These installations will be constructed mainly on large commercial rooftops and some on open parcels of land, with most sites ranging from 1 to 3 MW of generation capacity in size. Another 250 MW of large rooftop solar PV will be installed and operated by independent power producers with the power output being provided to SCE’s customers.

Edison International’s SPVP is targeted at the vast untapped resource of commercial and industrial rooftop space in Edison ’s service territory. The SPVP will aggressively bridge the gap between small- and large-scale solar installations. The solar power plants will be directly connected to Edison’s grid for wholesale generation and will therefore not require additional construction of transmission facilities.

California-based Edison International is a regulated utility holding company operating through its principal subsidiaries – Southern California Edison Company, Edison Mission Energy, and Edison Capital.

Southern California Edison is a regulated utility providing electricity to central, coastal, and southern California (excluding Los Angeles ). The subsidiary accounts for roughly 80% of Edison International’s total revenue and is one of the nation’s largest electric utilities serving a population of 14 million, through 4.9 million customer accounts in a 50,000-square-mile service area.

Our modestly bullish outlook for Edison International is supported by its consistent performance throughout its solid base of stable utility operations, rate hikes, ongoing alternative energy projects, balance sheet strength, and a relatively cheap earnings-based valuation; partially offset by a stagnant economy, volatile gas prices, low-hedged power output and coal positions, as well as risk regarding recovery of capital expansion costs. We reiterate our Neutral recommendation on the stock.