In addition to its bountiful mineral resources and fossil fuels, Australia boasts some of the best conditions in the world for solar power, states Roger Conrad, editor of Conrad's Utility Investor.
Aggressive Income Portfolio holding AGL Energy (Australia: AGL) (OTC; AGLNY), the country’s leading electricity generator from thermal fuels and wind and solar power, stands to benefit from the transition to clean energy.
AGL Energy’s retail arm is uniquely positioned to address growing demand for rooftop solar power and energy storage because of its existing customer relationships.
Later this year, the company will launch a pilot program that will roll out a thousand power storage systems to homes with solar installations on their rooftops.
Deployment will accelerate as the effort gains scale and costs decline. The company has partnered with LG Chem (Seoul: 051910), Tesla Motors (TSLA) and other technology leaders.
AGL Energy has committed to divesting or shuttering all its coal-fired power plants by 2045 and plans to replace this capacity with renewable energy.
The company also partnered with former affiliate APA Group (Australia: APA) to launch a bid for Alinta, a gas retailer and power producer in Western Australia.
This transaction would net AGL Energy another 800,000 retail customers, adding steady revenue and another market for its emerging solar power and energy storage solutions.
This month, AGL Energy won approval from the Queensland government for a 350-megawatt wind farm.
Meanwhile, US investors can recover the 15 percent withholding tax on dividends received from Australian companies by filing a Form 1116.
AGL Energy sports a solid 3.6 percent yield, but our investment thesis hinges on potential price appreciation. AGL Energy’s locally traded shares and American depositary receipt rate a buy up to US$15.
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By Roger Conrad, Editor of Conrad's Utility Investor
