EDP Renováveis Q1 2025: A 10% Surge in Renewable Generation Driven by Solar and North American Momentum

The first quarter of 2025 marked a pivotal moment for EDP Renováveis S.A. (EDPR), as the company reported a robust 10% year-on-year increase in total electricity generation to 10.9 TWh. This growth, fueled by strategic investments in solar capacity, favorable conditions in North America, and disciplined asset rotations, underscores EDPR’s position as a global leader in renewable energy. However, the report also highlights persistent challenges, particularly in Europe, where below-average wind resources dampened performance. Let’s dissect the numbers to assess the investment case.

The Solar Revolution: A 161% YoY Surge

The most striking development in Q1 2025 was the 161% year-on-year surge in solar generation to 1,728 GWh. This segment now accounts for 16% of total generation, up from a mere 6% in Q1 2024. Solar’s dominance stems from aggressive capacity additions, which contributed 72% of total gross capacity growth over the past year. With 1.0 GW of solar under construction in the U.S. alone, this trend is poised to accelerate.

The solar boom isn’t just about scale—it’s about strategic focus. EDPR has prioritized utility-scale solar projects in high-growth markets like North America, where 59% of total generation originated in Q1. This geographic diversification insulates the company from regional weather volatility.

Regional Performance: North America Shines, Europe Struggles

• North America: Delivered a 20% YoY increase in generation to 5,338 GWh, driven by new capacity and improved wind conditions. This region’s resilience reflects EDPR’s ability to capitalize on U.S. tax incentives and grid modernization.
• Europe: Saw a 14% YoY decline to 3,147 GWh, as weaker wind resources and net capacity adjustments weighed on results. The continent’s onshore wind load factor remained flat at 35%, underscoring the need for offshore wind and storage to stabilize output.
• South America: Bounced back with a 56% YoY rise to 946 GWh, benefiting from Brazil’s recovering hydropower and solar investments.

The Capacity Equation: Growth and Prudent Asset Management

EDPR’s installed capacity reached 19.3 GW as of Q1 2025, up 3.4 GW from a year earlier. Notably, 83% of this growth occurred in Europe and North America, regions critical to the company’s long-term strategy. With 2.4 GW under construction—including 1.0 GW solar and 0.7 GW onshore wind—the pipeline remains strong.

Asset rotations, such as the sale of Spanish and U.S. assets, signal a shift toward optimizing portfolios. These transactions, expected to close by summer 2025, free capital for high-return projects like offshore wind and storage.

Challenges: Weather, Delays, and Margins

Despite the headline growth, risks linger. Europe’s 14% generation decline highlights the vulnerability of onshore wind to meteorological conditions. Solar’s 5 percentage-point drop in load factor year-on-year also raises questions about resource variability and grid integration costs.

Moreover, delayed capacity additions in certain regions could compress margins. EDPR’s overall load factor held steady at 33%, but this masks underlying inefficiencies. The company must ensure its cost discipline keeps pace with its rapid expansion.

Outlook: Solar and Offshore Wind as Growth Catalysts

EDPR remains on track for ~2 GW of capacity additions in 2025, with all U.S. projects under construction. The Renewables Index, which rose to 101% in Q1, suggests improving resource conditions, particularly in North and South America.

Offshore wind, though small today (660 MW installed), is a critical future growth vector. Pairing this with 207 MW of energy storage positions EDPR to capitalize on grid flexibility demands.

Conclusion: A Compelling, if Uneven, Growth Story

EDPR’s Q1 results paint a company in transition. The 10% generation surge is driven by solar’s meteoric rise and North America’s dominance, but Europe’s struggles and solar’s load factor dip serve as cautionary notes.

Investors should take heart in two key metrics:
1. Solar’s 161% YoY growth signals a structural shift toward this technology, which now accounts for nearly a fifth of output.
2. North America’s 59% contribution to total generation and its 20% YoY growth demonstrate the region’s potential as a profit engine.

Meanwhile, the 2.4 GW under construction and disciplined asset sales suggest management is balancing scale with profitability. If EDPR can execute its offshore wind and storage roadmap while mitigating European weather risks, the stock could outperform peers. For now, the data supports a buy rating, provided investors are prepared to weather short-term volatility tied to regional weather patterns.

In a sector where consistency matters, EDPR’s Q1 results are a reminder that renewable energy’s future is as much about diversification as it is about scale.