While power sector holdouts such as FirstEnergy get headlines by pushing for disingenuous regulatory changes in a vain attempt to make the future look like the past, many U.S. power companies are seeing the light in the low and predictable costs of large-scale wind and solar.

One of the leaders in this regard is Florida power company NextEra Energy. The company’s Q1 2018 results show NextEra building not only large amounts of solar both through generation arm NextEra Energy Resources and utility Florida Power and Light, but also beginning to deploy large-scale energy storage through both companies.

During Q1 NextEra Energy Resources added 334 MW of solar projects to its development pipeline, as part of 1 GW of combined wind and solar. The company has signed contracts to build 483 MW of solar in the 2017-2018 timeframe, and 1.1 GW of projects in the 2019-2020.

Including new projects, NextEra says that it is on track to build between 1.4 and 3.8 GW of solar through the end of 2020, and notes an increasing momentum. On the company’s quarterly call, CEO Eric Silagy cited “increasingly strong demand for wind and solar, which will continue to benefit from the retirements of nuclear and coal projects.”

And while all of this is impressive, deployment of solar is only part of the story. This week Energy Resources put online its first utility-scale solar plus energy storage project, which follows two such projects at FPL.

Silagy says projects paired with energy storage represent “the next phase of renewables deployment”.

“(Solar plus storage) can provide a product that can be dispatched as needed,” notes Silgay. “All at a lower cost than that required to operate traditional, inefficient resources.”

Utility solar (plus storage)

But while many power companies for years have been aggressive about building renewable energy through their generation arms but resistant in their utility service areas, NextEra’s progress through utility FPL is if anything more impressive.

During Q1 FPL put online the first 596 MW of solar projects through a new development initiative, under which its customers are paying for the up-front costs of building the projects. This “rate base” strategy is how many monopoly utilities have funded conventional power plants, particularly risky and expensive projects such as nuclear power plants.

FPL was allowed to use its Solar Base Rate Adjustment (SOBRA) as the result of the settlement of the utility’s 2017 rate case, and has been followed by other utilities throughout the nation. Despite sticking its customers with the up-front costs, the 600 MW is expected to save FPL customers $100 million over the lifetime of the projects.

This is only the beginning, and under its most recent 10 Year Power Plant Site Plan FPL plans to deploy 3.2 GW of solar in the coming years.

Like Energy Resources, FPL is also deploying solar plus storage. During the quarter the utility deployed the first two projects under its battery pilot program, both of which are notable. The Babcock Energy Center pairs 74.5 MW of solar with a 10 MW/40 megawatt-hour (MWh) battery, which makes it the largest solar plus storage project online in the United States.

NextEra describes The Citrus Energy Center, which is paired with a 4 MW/16 MWh battery, as the first utility-scale DC coupled solar plus storage system in the United States. The project is designed to capture electricity that would have been clipped during peak production days.

Tariffs, tax equity not issues

As much of 400 MW of the PV modules used in NextEra projects could come from the new factory that JinkoSolar is building in Florida, which will not be subject to import duties under Section 201. The company also says that it is in no near-term risk of having to import modules subject to tariffs, noting that it warehoused modules for 2018, 2019 and even into 2020 before the import duties took effect in early February.

“We are in one of the best renewables environments that we have ever been in,” notes Silagy. CEO Silagy notes that the company has “the largest renewable energy operation in North America”, and states that “we truly enjoy a competitive advantage that has not changed.”

And despite fears around the availability of tax equity due to tax reform, Silagy says that this is not a problem either. “We have not seen anything on the tax equity side that suggest any compression,” notes Silagy. “If anythings we’ve seen tax equity prices fall.”

NextEra has done all of this while remaining profitable and keeping rates low at Florida Power and Light. The company reported a 27% operating margin at FPL, and a 31% operating margin at NextEra Energy Resources during the first quarter, which was further buoyed by other financial gains.