Canadian Solar Inc. (CSIQ) announced that it entered into a module supply agreement with one of the largest U.S. residential installers, Real Goods Solar Inc. (RSOL). Under the agreement, Canadian Solar will supply up to 40 MW of high-performance solar modules to Real Goods Solar to power a range of commercial and residential installations in the U.S.
Canadian Solar's modules have been awarded key international certifications attesting to the rigors of their formal inspections and testing. The company is ranked among the top of the California Energy Commission's Solar Electric Incentive Program for their high PTC efficiency ratings. Canadian Solar is focused on delivering the best value in solar with their recognized high-performance solar modules and backstop warranty.
Real Goods Solar is a leading provider of turnkey commercial and residential solar energy solutions, with more than 13,000 solar systems in place. Real Goods Solar has more than 33 years of experience in solar energy, beginning with the sale in 1978 of the first solar photovoltaic panels in the United States. With 16 offices across the West and the Northeast, Real Goods Solar is one of the largest solar energy installers in the U.S.
Canadian Solar is a vertically integrated manufacturer of silicon ingots, wafers, cells, solar modules, panels and custom-designed solar power applications. The company designs, manufactures and delivers solar products and solar system solutions for both on-grid and off-grid use by customers worldwide. It mainly focuses on delivering best value in solar with recognized high-performance modules. Canadian Solar has its module agreements spread worldwide. Only last month, the company delivered its solar modules for a photovoltaic plant in the German city of Dreieich-Buchschlag. The plant has a generation capacity of 8 MW.
Being a low cost solar module producer, Canadian Solar focuses on delivering high-performance modules. The prospects for Canadian Solar look favorable based on a geographically diverse customer base and improving operating efficiencies through its vertically integrated manufacturing operation.
However, in the near term, we are concerned about the industry-wide oversupply, leading to sharply falling Average Selling Prices, tepid module demand in Europe and rising competition in the market. Moreover, given the industry-wide high inventory level, we do not foresee any short-term improvement in margins of the company. The company retains a short-term Zacks #3 Rank (Hold) that corresponds with our long-term Neutral recommendation on the stock. It mainly competes with First Solar Inc. (FSLR) and Suntech Power Holdings Co. Ltd. (STP).
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