Credit: Shutterstock photoCanadian Solar Inc.CSIQ has secured 5 solar photovoltaic ("PV") projects totaling 185 megawatts ("MW") in the recent solar-only reserve auction held in Brazil. The location of the projects is Pirapora, in the Brazilian state of Minas Gerais.
Canadian Solar will develop and construct the solar power plants. Once the company connects these plants to the grid, it will sign a 20-year Power Purchase Agreement to sell the electricity generated for approximately $84/MWh to a Brazilian government entity.
According to Canadian Solar, Brazil enjoys considerable solar exposure and a large energy market, which will allow the company to establish its brand, gain market share and improve shareholder wealth.
All of the five projects are scheduled to complete in mid-2017. The company will select prospective partners for these projects, which should provide sufficient developer margins if and when it decides to sell them.
In the latest auction, Brazil delivered over 800 MW of solar projects at a price as low as 8 cents/kWh. The country's recent auction qualified over 11 gigawatt ("GW") of solar development across more than 341 pre-approved solar PV projects. Apart from Canadian Solar, Enel Green Power SpA, a unit of Italy's biggest utility and SunEdison Inc. SUNE have scored from the latest bid.
Brazil enjoys major growth potential in the renewable energy space. As per GTM Research report, the country has a robust mid-term outlook for solar energy in particular. GTM Research expects 5.7 GW to be installed in the nation by 2020, with 96% coming online after 2016.
Ontario, Canada-based Canadian Solar caters to a geographically diverse customer base spread across key markets in the U.S., Canada and Europe, as well as emerging markets like South Korea, Singapore and Brazil. The company has a strong pipeline of projects and is known for its acquisitions and strategies that further consolidate its position.
Canadian Solar's late-stage utility-scale solar pipeline totaled approximately 2.4 GW at the end of second-quarter 2015. In Japan, the company completed the construction and grid connection of three solar PV power plants, with a total production capacity of approximately 5.2 MWp during the quarter. Other projects under development include approximately 320 MWp in China, 55.6 MWp in the UK and 114 MWp in Brazil.
Zacks Rank
Canadian Solar currently has a Zacks Rank #3 (Hold). JA Solar Holdings Co. Ltd. JASO and ReneSola Limited SOL are better-ranked stocks in the solar industry, both sporting a Zacks Rank #1 (Strong Buy).
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
