Image source: Getty Images
Terrific news for SSE (LSE: SSE) shares. In spite of a smattering of protests, including a certain red-capped president saying “Stop the windmills”, a new wind farm development has been approved off the coast of the Scottish Borders.
The self-titled “UK’s clean energy champion” will be building what is expected to be the world’s largest offshore wind farm. It will provide enough power for the annual energy needs of Scotland twice over!
Britain’s solar production reached a new high in 2025 (a third higher than 2024) and Net Zero 2050 inches ever closer. Could this backdrop make the FTSE 100 energy company a terrific stock to buy? Is the share price of the country’s brightest green energy firm set to rise from here on out? Should I buy SSE shares?
Big targets
A brand spanking new windfarm does sounds promising. But the SSE share price moved about as much as one of its turbines on a windless day. That is to say, it didn’t really move. The share price has been more or less level for about 10 years now, too.
SSE might be leading the world in its investment in green energy infrastructure. But, the markets aren’t enamoured with the stock. All this investment is costly, too. SSE has high debt and a rebased dividend, both of which make this stock look less than attractive. Its forward dividend yield of 5.24% is competitive with other FTSE 100 companies. But, it’s some way below what I’d hope to achieve as a total return.
Analysts’ forecasts offer hope for the share price with an average target that’s 33.2% higher over the next 12 months. One analyst is predicting a 51.4% increase!
A buy?
Personally, I’m not buying stocks for the returns over a year. Looking longer term, though, the bigger question is that of wind’s role as an energy source. If offshore windfarms can slot into a country’s energy supply, then we might see SSE start to roll out the technology on a wider scale.
The firm has already expanded to other regions such as the SSE Airtricity division in Northern Ireland and the Republic of Ireland. But is the technology really there for a widescale rollout yet? The UK doesn’t have enough battery storage for the wind it does produce.
The cost of wasted wind power this year has been £752m already. That’s money shelled out to wind farms to stop running because the grid can’t handle the surplus electricity. The introduction of more advanced batteries may put a stop to this problem. It may also make SSE look like a great buy years from now. But it’s not a stock I will buy at this moment.
