Barclay’s downgrades utilities sector, and that’s good news.
For investors who have in the past favored utilities as solid investments, Barclay’s recently downgraded the entire utilities sector in large part due to the surge in renewable energy and associated distributed power processes. This has the potential to disrupt the old tried and true electric utility sector.
Solar Gains Momentum
The growth in solar power and storage technologies are moving closer to cost-parity with traditional power generation in several key states including California, New York and Hawaii. Investors may soon realize that the risk-reward potential for investing in distributed generation companies will be at a par with the traditional utilities, and with momentum moving toward the renewables sector.
In the 100+ year history of the electric utility industry, there has never before been a truly cost-competitive substitute available for grid power. We believe that solar + storage could reconfigure the organization and regulation of the electric power business over the coming decade” — Barclay’s
This interesting article, posted on GreenBiz.com, goes into more refined details of why this shift will be beneficial for electricity consumers since they ultimately will have more leverage in where they purchase their power, or produce the power themselves.