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Monday, June 02, 2014

Wall Street's Utility Bond Warnings

As we transition to the Internet of Energy, utilities are heading for trouble. And, Wall Street is beginning to recognize that utility bonds are simply not safe for investment purposes. Wall Street Firms Step Up Warnings About Distributed Energy’s Threat to Utilities reports:
In recent months, Citigroup, Bank of AmericaGoldman Sachs and UBS have issued economic analyses or downgrade warnings for the power sector, calling distributed generation an existential threat to electricity providers. These don't even include the series of reports from Wall Street projecting the coal industry's decline.

The latest comes from analysts at Barclays, who wrote last week they expect corporate bonds in the utility sector to underperform against the market. Barclays targeted the combination of solar and storage as the primary disrupter.

It's nice to see that Wall Street is echoing our warnings, finally.