A Canadian Solar Inc. (CSIQ) unit – Canadian Solar Solutions Inc. – has completed the sale of Mississippi Mills, to TransCanada Corporation (TRP). Canadian Solar sold the project for more than $57.4 million (C$61.0 million). This deal follows the sale of two other solar power plants – Brockville 2 and Burritts Rapids – in Sep 2013 as well as the sale of Brockville 1 in June last year by the Canadian Solar unit.
Located in Ontario, Canada, Mississippi Mills solar power plant has a capacity of 10 megawatt AC. This is the fourth of the nine solar power plants that TransCanada agreed to buy back in 2011. The nine projects comprising 86 MW of solar farms will cost about C$470 million.
In June last year, Canadian Solar completed the sale of Brockville 1, a 10 MW AC solar power plant, to TransCanada for $52.2 million. This was the first of the nine solar plants planned for sale. Again in September, the Canadian Solar unit completed the sale of two projects, Brockville 2 and Burritts Rapids, to TransCanada. Canadian Solar sold the projects for more than $92.2 million (C$95.0 million). These projects have a total electric generation capacity of 16.0 MW AC.
Canadian Solar caters to a geographically diverse customer base spread across its key markets in Germany, Spain and the U.S., as well as emerging market opportunities in France, the Czech Republic, Italy, South Korea, Canada, Japan and China. Canadian Solar is a vertically integrated manufacturer.
This sale reflects Canadian Solar’s recent strategic shift toward selling solar power plants rather than being confined as a photovoltaic (:PV) module manufacturer solely. The company’s China based manufacturing assets give it a distinct cost advantage over its peers. Recently, Canadian Solar Solutions struck a deal with a fund managed by DIF, whereby the latter will purchase four utility-scale solar power plants in Ontario, Canada. The agreement is subject to customary closing conditions.
Canadian Solar also hopes to benefit from a recovering solar industry in Europe in 2014, chiefly driven by Germany, the U.K., Italy and France. Currently, the company carries a Zacks Rank #4 (Sell).
However, better-ranked solar operators include JinkoSolar Holding Co. Ltd. (JKS), First Solar Inc. (FSLR) and Enphase Energy, Inc. (ENPH). While JinkoSolar carries a Zacks Rank #1 (Strong Buy), First Solar and Enphase Energy hold a Zacks Rank #2 (Buy).
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Zacks Investment Research
- Solar Power
- Canadian Solar
- TransCanada Corporation