Why Southern California Edison Is Poised for Growth in the Clean Energy Era

Southern California Edison (SCE), a subsidiary of Edison International (NYSE: EIX), is positioning itself as a leader in the global energy transition, and investors should take notice. With ambitious renewable energy targets, strategic infrastructure investments, and a track record of regulatory compliance, SCE is primed to capitalize on the surge in demand for clean energy and grid modernization. Let’s break down why this utility giant could be a top pick for investors in 2025.

The Renewable Energy Play: Wind, Solar, and Storage
SCE has been a先行者 in integrating renewables into its energy mix. By 2016, renewables already accounted for 28.2% of its power supply, and the company aims to reach 100% carbon-free energy by 2045—aligning with California’s net-zero goals. Key projects include the Tehachapi Wind Farm (up to 1,500 MW) and a 500 MW photovoltaic solar project, though some ventures, like the Stirling Energy solar plant, were shelved in favor of more cost-effective solutions.

What’s most compelling is SCE’s energy storage innovation. The Tehachapi Energy Storage Project, a lithium-ion battery system, and hybrid gas turbine-battery plants (launched in 2017) have slashed greenhouse gas emissions by 60% while reducing water usage by 2 million gallons annually. This expertise positions SCE to profit as energy storage becomes a $100 billion market by 2030.

EV Infrastructure: Charge Ready for Growth
SCE’s Charge Ready program is expanding EV charging infrastructure, with over 1,000 stations installed by 2018 and plans to add thousands more. The company also offers rebates for EV purchases, directly benefiting from the U.S. EV market’s expected 30% annual growth rate through 2030.

Strategic Procurement and Regulatory Tailwinds
In 2024, SCE launched its Local Resource Adequacy Request for Offers (Local RA RFO), aiming to secure multi-year capacity for the Los Angeles Basin and Big Creek-Ventura regions. This procurement underscores SCE’s role as a Central Procurement Entity (CPE), leveraging its scale to attract investors in renewable projects. The initiative aligns with California Public Utilities Commission mandates, reducing regulatory risk and ensuring steady demand for SCE’s services.

A Strong Balance Sheet and Governance
Despite Fitch Ratings’ 2022 downgrade (due to debt levels), SCE’s outlook remains stable. The company’s governance earned top scores in 2023, including a “Trendsetter” 100% rating on the CPA-Zicklin Index for political transparency and a “GB” gender-balanced rating. Such accolades signal institutional stability—a critical factor for long-term investors.

The Investment Case: Why Act Now?
1. Clean Energy Boom: SCE’s renewable and storage projects directly benefit from federal tax credits and California’s aggressive decarbonization policies.
2. EV Infrastructure Play: Charge Ready and partnerships with automakers position SCE to capture EV adoption’s upside.
3. Undervalued Stock: At current levels, EIX trades at a 12.5x P/E ratio, below its 5-year average and peers like Southern Co (SO).
4. Regulatory Certainty: Its CPE role and compliance track record reduce execution risk in an era of tightening environmental rules.

Risks? Check Them, but Don’t Overreact
SCE faces headwinds, including labor disputes (e.g., the 2015 IT layoffs) and litigation over nuclear waste storage. However, these are manageable given its financial resilience and strong leadership.

Final Call: Buy EIX for the Transition
SCE is a “buy” for investors seeking exposure to the clean energy shift. With a robust pipeline of projects, regulatory tailwinds, and undervalued stock, now is the time to act. As the grid modernizes and EVs dominate, SCE’s dominance in California’s $20 billion utility market will pay dividends—for years to come.

Don’t miss the train. The energy transition isn’t just a trend—it’s the future. And SCE is driving it.