Clean Energy Leadership: How Duke Energy and Exelon Are Reshaping the Power Sector

The transformation of America’s power utilities is accelerating. Driven by climate commitments, federal clean energy incentives, and rising demand from data centers, traditional electricity providers are evolving into infrastructure backbone companies. Two major players—Duke Energy (DUK) and Exelon Corporation (EXC)—exemplify this shift, yet they’re taking distinctly different paths. Understanding their strategies reveals which might better serve growth-oriented investors today.

The Infrastructure Imperative Reshaping Utilities

Modern utilities face mounting pressure to modernize. Beyond traditional rate increases, they’re deploying capital at unprecedented scales to address three simultaneous demands: aging grid infrastructure, the surge in electricity consumption from AI-driven data centers, and the nationwide pivot toward renewable generation. This creates both opportunity and risk—companies that execute cleanly gain competitive moats; those that stumble face regulatory headwinds.

The sector itself is becoming more attractive. Regulated utilities generate predictable cash flows because public utility commissions typically pre-approve rates and acceptable returns. This structural advantage is drawing institutional capital into what was once considered a stagnant sector.

Duke Energy’s Aggressive Decarbonization Bet

Duke Energy is charting an ambitious course: net-zero emissions by 2050. The company has already cut carbon output by 44% since 2005 and plans to retire most coal capacity by 2030, with complete coal exit by 2035. Its EV adoption program reflects this broader strategy—electrifying its own fleet while expanding customer charging networks.

The capital commitment is staggering. Duke Energy plans to deploy $190-$200 billion over the next decade, with $95-$105 billion allocated to 2026-2030. The company has already invested $9.88 billion in the first nine months of 2025 and projects $15 billion for the full year. This reflects Duke’s positioning as a leader in the clean energy transition—though “leader” here means accepting near-term earnings dilution for long-term positioning.

Earnings Growth: Zacks estimates Duke’s EPS will grow 7.12% in 2025 and 6.1% in 2026.

Exelon’s Distribution-Focused Efficiency Model

Exelon is taking a narrower but arguably more resilient path. Rather than chasing generation transformation, it’s doubling down on transmission and distribution—the boring-but-essential backbone. This matters: a substantial portion of Exelon’s distribution revenue is decoupled from customer usage, meaning weather and economic cycles have less impact on earnings.

The company serves over 10 million customers across seven regulatory jurisdictions, providing diversification most utilities lack. Exelon’s capital deployment is more focused: $38 billion across 2025-2028, with $21.7 billion to electric distribution, $12.6 billion to transmission, and $3.8 billion to gas delivery. Management is also exploring an additional $10-$15 billion in transmission upgrades—but this remains optional rather than committed.

The data-center angle is particularly compelling for Exelon. Its pipeline of over 19 gigawatts provides visibility into future demand that’s largely pre-contracted, reducing revenue uncertainty.

Earnings Growth: Exelon’s EPS is projected to rise 8% in 2025 and 4.26% in 2026—faster near-term growth but slower long-term expansion.

Profitability and Capital Efficiency

Both companies deploy shareholder capital effectively. Duke’s ROE stands at 9.98%, while Exelon edges ahead at 10.29%—both exceeding the industry average of 9.9%. This suggests neither is destroying value, but Exelon’s model achieves slightly better returns with a less aggressive capital program.

Shareholder Returns and Valuation

Dividend yields tell a similar story: DUK yields 3.62% and EXC yields 3.61%, both substantially outpacing the S&P 500’s 1.1% average. For dividend-seeking investors, either works.

On valuation, Exelon appears cheaper: trading at a forward P/E of 15.74X versus Duke’s 17.55X. This reflects market caution about Duke’s heavier capex burden and slower near-term earnings growth. Whether this discount is justified depends on your conviction in Duke’s long-term clean energy narrative.

Which Stock Fits Your Portfolio?

This isn’t a question of which company is “better”—both are fundamentally sound. It’s about time horizon and risk tolerance.

Choose Exelon if: You want steadier near-term earnings growth (8% this year), slightly better profitability metrics, a lower valuation anchor, and less worry about massive capex cycles. The company’s distribution focus means more predictable revenues, and the data-center tailwind is already locked in.

Choose Duke Energy if: You believe in Duke’s decarbonization thesis and want exposure to the energy transition’s upside. Your returns will be compressed short-term but could accelerate once the capex cycle moderates post-2030 and clean generation scales.

Both stocks carry a Zacks Rank #3 (Hold) rating. Our current lean favors Exelon—its combination of faster near-term earnings growth, superior ROE, and attractive valuation provides a better risk-reward profile for the next 12-24 months. Duke Energy remains a solid long-term holding, but today’s valuation premium isn’t yet justified by its earnings trajectory.