The AES Corporation AES recently announced that it has signed two long-term Power Purchase Agreements (PPA) with Meta to support the latter’s data centers with 650 megawatt (MW) of solar capacity. These solar projects are located in Texas and Kansas cities in the United States.

AES’ Presence in the Solar Market

AES is actively scaling up its solar power initiatives to reap the benefits of the rising demand trend of the U.S. solar market, backed by significantly expanding investments, especially from large corporate clients. Notably, in the first quarter of 2025, the company completed the construction of 643 MW of solar and energy storage projects.

With solar accounting for 66% of all new electricity-generating capacity added to the U.S. grid in 2024 (per the Solar Industries Association’s report) amid rapidly growing energy demand from renewable sources across the nation, AES is more aggressively bolstering its renewable energy generation capacity, with solar at the center of focus. As of March 31, 2025, the company signed 7.7 gigawatts (GW) of long-term PPAs to build renewable capacity that supports the energy needs of data centers.

Meanwhile, the company’s AES Indiana subsidiary received final regulatory approval for the 170 MW Crossvine solar-plus-storage project during the first quarter, which is expected to come online in 2027. It is also making progress on the 295 MW Petersburg Energy Center, a solar-plus-storage facility expected to go live by the end of 2025. Looking ahead, AES Indiana aims to bring up to 1,300 MW of new wind, solar, and storage capacity online by 2027.

Rising Solar Prospects and Utilities

The solar market provides significant growth opportunities, primarily driven by favorable government policies, declining prices of solar panels and the rising adoption of clean power sources.

Per the U.S. Energy Information Administration, solar power is expected to drive the largest increase in electricity generation, with output projected to grow 34% in 2025 and 18% in 2026. This offers a significant profit incentive to utilities like AES to significantly enhance their solar generation capacity.

Other utilities expanding their solar generation capacity include the following:

CMS Energy Corporation CMS: It plans to add 9 GW of solar generation to its portfolio during the 2025-2045 period. The company also collaborated with the Muskegon County Resource Recovery Center to develop consumers’ first large-scale, self-developed solar project, a 250 MW solar energy center, expected to be fully operational by 2026.

The Zacks Consensus Estimate for CMS’ 2025 earnings per share is pinned at $3.59, indicating year-over-year growth of 7.5%. The consensus estimate for 2025 sales is pinned at $8.11 billion, indicating year-over-year growth of 8%.

Ameren Corporation AEE: Its Cass County, Huck Finn and Boomtown solar projects were placed in service during the fourth quarter of 2024. These projects are expected to collectively generate 500 MW of clean energy.

The Zacks Consensus Estimate for AEE’s 2025 earnings per share is pinned at $4.93, indicating year-over-year growth of 6.5%. The consensus estimate for 2025 sales is pinned at $8.41 billion, indicating year-over-year growth of 10.4%.

PPL Corporation PPL: Its subsidiaries, Louisville Gas and Electric Company and Kentucky Utilities Company, requested the Kentucky Public Service Commission for approval of nearly 1 GW of solar generation by 2028 as part of the companies' generation replacement strategy.

The Zacks Consensus Estimate for PPL’s 2025 earnings per share is pinned at $1.82, indicating year-over-year growth of 7.7%. The consensus estimate for 2025 sales is pinned at $8.85 billion, indicating year-over-year growth of 4.6%.

Story Continues

Price Performance

Shares of AES have lost 2% in the past month against the industry’s 0.9% growthZacks Investment Research

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Zacks Rank

AES currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.

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