BP Announces Renewable Energy Project Investment Worth $220M – Yahoo Finance

BP plc BP entered an agreement to acquire 9 gigawatts (“GW”) of solar development projects in the United States from 7X Energy, Inc. in an effort to enhance its renewable business in the country.

The acquired projects spread across 12 states in the United States, with the largest portfolios in the Electric Reliability Council of Texas as well as the Midwest Pennsylvania, New Jersey and the Maryland area.

Importantly, BP anticipates the transaction to be complete in 30 days. It also expects all projects to become operational by 2030. Once the projects are developed fully, the company expects to generate sufficient clean energy to power 1.7 million homes in the United States.

Notably, BP intends to combine the new solar energy projects with its existing U.S. onshore wind, natural gas and energy trading businesses to provide reliable, affordable and clean energy for customers.

The company will pay $220 million and 1 GW of safe harbor equipment for the projects to US-based independent solar developer 7X Energy. Lightsource BP, a 50/50 joint venture company of BP, will develop and operate the new solar assets. The assets are expected to generate returns of 8-10%.

Notably, the deal will accelerate BP’s target of developing 20 GW of low-carbon energy by 2025 and to increase the same to 50 GW by the end of the decade. Moreover, it will increase the company’s renewable pipeline from 14 GW to 23 GW and hopes to start developing nearly 2.2 GW of the acquired pipeline by 2025.

Above all, the transaction will allow BP to exercise a significant influence on the U.S. solar market as it continues to expand its presence across the country. Per the company, solar power accounts for more than 40% of all new generation capacity in the country and is likely to quadruple in the upcoming years.

Company Profile & Price Performance

Headquartered in London, UK, BP is a fully integrated energy company, with a strong focus on renewables.

Shares of the company have outperformed the industry in the past six months. Its stock has gained 28.1% compared with the industry’s 22.6% growth.

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Zacks Rank & Stocks to Consider

BP currently carries a Zack Rank #3 (Hold).

Some better-ranked players in the energy space are Suncor Energy, Inc. SUN, Extraction Oil & Gas, Inc. XOG and PDC Energy, Inc. PDCE, each currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Over the past 60 days, the Zacks Consensus Estimate for Suncor’s 2021 earnings has been raised by 69.5%, while that for Extraction has been raised by 352.3%.

PDC Energy’s earnings for 2021 are expected to increase 17.2% year over year.

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