NRG Energy Inc. (NRG) and ProLogis Inc. (PLD) recently joined hands for a $2.6 billion project to place solar panels on rooftops of industrial buildings in 28 states over a span of four years. The companies said that this is one of the most ambitious clean-energy projects in recent years.
Charlotte, North Carolina-based Bank of America Corporation (BAC) has agreed to finance about $1.4 billion for the $2.6 billion solar project. Bank of America said that the U.S. Department of Energy has offered to partially support the bank’s financing for the project by an 80% loan guarantee.
Other than the bank’s financing, the remaining cost for the $2.6 billion solar project is expected to be financed by NRG Energy and Prologis. NRG Energy has agreed to provide equity financing for first phase of the program over the next 18 months. It also has the right of first offer for the rest of the program and will provide development resources and project expertise. Prologis will also invest in each phase.
As part of the project, named Project Amp, the companies will install rooftop photovoltaic projects on 750 industrial buildings owned by Prologis, the world’s largest warehouse manager. The project is expected to generate about 733 megawatts of energy, capable of powering more than 100,000 homes. The installations built on facilities owned by ProLogis will be co-owned by NRG Energy.
The project is also expected to create roughly 10,000 construction, manufacturing and other jobs.
The companies plan to sell the electricity generated from the solar panels to power utilities. The project will begin in California. Power from the initial 15.4-megawatt installation in Southern California is expected to be sold to Edison International’s (EIX) utility, Southern California Edison Company.
Based in Princeton, New Jersey, NRG Energy Inc. operates as a wholesale power generation company. The company is also deals in trade of fuel and transportation services, and trade of energy, capacity, and related products in the United States and internationally.
We maintain a Neutral recommendation on NRG Energy in the long term. The quantitative Zacks #3 Rank (short-term Hold rating) for the company indicates no clear directional pressure on the stock over the near term.
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