Emeren Group Ltd. SOL recently declared that it has signed a seven-year Power Purchase Agreement (“PPA”) for a 15 megawatt-peak (MWp) solar farm in Poland. The solar farm in Poland's southwest Silesia region will provide clean energy to a global consumer product company's Polish unit under a pay-as-produced agreement.
The solar farm will create roughly 14,958 megawatt-hours (MWh) of renewable energy per year, reducing carbon dioxide emissions by around 16,150 metric tons.
SOL’s Expansion Spree in Europe
Project monetization has been a well-known revenue-generating strategy for Emeren, a renowned solar project developer. With its already established footprint in Europe, a region that contributes 49% of SOL’s total revenues (as per its last reported quarter), the company diligently follows the strategy of building and selling valuable solar projects across this continent. The latest project is yet another bright example of that.
In line with this strategy, in September 2024, SOL divested a 57 MWp Solar Project Portfolio in France. In July 2024, the company divested a 42 MWp ready-to-build solar project portfolio in Spain.
As per the European Union’s solar energy strategy report, 320 gigawatts of solar photovoltaic are expected to come online by 2025, more than doubling from what came online in 2020. This offers ample growth opportunities for SOL and should encourage the company to expand its footprint in this region through similar project monetization.
As of Sept. 30, 2024, Emeren had 5,457 MW of solar projects in the pipeline under advanced-stage and early-stage development in Europe. Such a solid pipeline would enable Emeren to duly generate solid revenues from Europe in future quarters.
Opportunities for SOL’s Peers
Other prominent solar players, such as Enphase Energy, Inc. ENPH, Canadian Solar Inc. CSIQ and SolarEdge Technologies Inc. SEDG, are also expanding their footprint in the European region to reap the benefits of the growing solar market’s prospects.
In August 2024, Enphase Energy declared that it has started distributing its IQ8 Microinverters to aid the latest high-capacity solar modules in several European nations, including Bulgaria, France, Germany, Spain, Estonia, Slovakia and Croatia.
ENPH’s long-term (three to five years) earnings growth rate is 3.6%. The Zacks Consensus Estimate for its 2025 sales implies an improvement of 27.7% from the prior year’s estimated figure.
Canadian Solar enjoys a solid presence in Germany, Poland, Spain, Italy, France and the Netherlands. As of Sept. 30, 2024, the company had 5,045 MW of an early-stage pipeline in the EMEA.
CSIQ’s long-term earnings growth rate is 25%. The Zacks Consensus Estimate for its 2025 sales indicates an improvement of 18.4% from the prior year’s estimated figure.
SolarEdge has a strong presence in Germany, the United Kingdom and Switzerland. On Dec. 3, 2024, SolarEdge launched its first commercial storage system (CSS) in Germany. The new CSS-OD battery provides commercial organizations with a closely integrated, high-efficiency solar and storage solution that optimizes the economics of solar self-consumption.
SEDG’s long-term earnings growth rate is 1.2%. The Zacks Consensus Estimate for its 2025 sales calls for an improvement of 36.7% from 2024’s estimated sales.
SOL Stock Price Movement
In the past six months, Emeren shares have risen 27.4% against the industry’s decline of 21.6%.
Image Source: Zacks Investment Research
SOL’s Zacks Rank
Emeren currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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