Dive Brief:

NextEra Energy added over 1 GW of new renewables projects to the backlog during its second quarter this year, leading to a record backlog for the company's development unit of 7.4 GW wind, solar and energy storage.

The influx of new signed contracts show confidence in lower prices of renewables products. ​ NextEra , whose batteries have added $0.015/kWh to the cost of wind and solar projects built in the last six to 12 months, anticipates storage costs to fall to $0.005/kWh for projects paired with renewable energy in 2025.

Most of the battery storage development requests during Q2 are for products in 2021 and 2022, when customers anticipate lower prices, NextEra CEO Jim Robo said during the Q2 earnings call on Wednesday.

Dive Insight:

Based on the anticipated price drops and efficiencies achieved in the technology, customers are now more likely to buy solar and storage much farther in advance, Robo said in the earnings call. Overall, he said prices for solar and storage are dropping a little bit faster than for wind.

"I think what's happened on the solar side is exciting, especially when you see what prices are doing in 2020 and beyond," Robo said in the investor call.

While the solar and storage contracts signed this quarter represent projects that will come online later, the company will be building "a heck of a lot more wind" through the end of 2020, Robo said.

NextEra renewables projects added to backlog in Q2 Project Total 2018 Deployment Post-2018 Deployment Wind 300 MW 99 MW 201 MW Solar 692 MW 21 MW 671 MW Battery Storage 90 MW 15 MW 75 MW SOURCE: NextEra Q2 Presentation

While some market analysts anticipate cost declines for storage systems to slow as raw material prices rise, Robo does not expect the company to face too much pressure in the longer term from using cobalt or other chemistries.

"All of these little blips will get taken care of, and battery cost curves will just continue to come down," Robo said, referring to cobalt price pressure.

While the company has an expansive renewables portfolio, NextEra has long indicated it wants to move toward more regulated utility assets.

NextEra subsidiary Florida Power & Light expects to complete their acquisition next week of Florida City Gas, along with other acquisitions in the first half of 2019 of Gulf Power and other Southern Co. natural gas assets in Florida. The deal is subject to regulatory approval.