Shares of utility NextEra Energy are experiencing a significant decline, reminiscent of the early days of the pandemic, as concerns over higher interest rates continue to wreak havoc on clean-energy stocks. NextEra Energy’s troubles began when its renewable-energy subsidiary, NextEra Energy Partners LP, lowered its growth expectations through 2026 due to increased borrowing costs, leading to difficulties in financing projects. This downward trajectory has resulted in a recent 11% drop in the stock, marking its largest one-day decline since the start of the pandemic in March 2020.
The decline in NextEra Energy’s stock is primarily attributed to concerns surrounding higher interest rates and their impact on clean-energy investments. As interest rates rise, the borrowing costs for companies like NextEra Energy become more expensive, making it challenging to fund renewable energy projects. NextEra Energy Partners LP, a publicly traded subsidiary, has revised down its growth expectations, recognizing the mounting difficulties in securing funding due to these increased borrowing costs. The repercussions of this revision have been felt in NextEra Energy’s stock, which is currently facing its most significant one-day drop since the pandemic began.
This decline in NextEra Energy’s stock is reminiscent of the market volatility witnessed in the early days of the pandemic. With a recent 11% drop, NextEra Energy is on track to record its most significant one-day decline since March 2020. The ongoing concerns regarding higher interest rates have put immense pressure on clean-energy stocks, and NextEra Energy is no exception. As the company’s renewable-energy subsidiary revised down its growth expectations, citing difficulties in financing projects, investors have become increasingly wary. The impact of these concerns continues to be visible in the downward trend observed in NextEra Energy’s stock.
