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Canadian Solar (CSIQ) Begins Operations at Japan Solar Project

Canadian Solar Inc. CSIQ recently announced the commencement of operations at its flagship mega solar project in Japan. The Azuma Kofuji solar project located in the Fukushima Prefecture boasts a capacity of 100 megawatt-per hour (MWp).

Details of the Project

Canadian Solar’s Azuma Kofuji, powered by its high-efficiency HiKu modules, is claimed to be its largest solar project in Japan. The project is likely to be accretive to its sales for the long term as the company has inked an energy purchase deal with Tohoku Electric Power Company at the rate of 26 cents per kilowatt-hour (kWh). This deal will last for 18 years, thereby ensuring bright revenue generation prospects for CSIQ from the new project.

Spread across 460 acres of land, Azuma Kofuji is likely to generate 106,800 MWh of clean and reliable energy. This will be enough to power roughly 31,000 households in the Fukushima area. The project is anticipated to assist Japan in taking a step forward in attaining its 2050 carbon neutrality goal as it will encourage replacing nearly 50,000 metric tons of CO2-equivalent emissions per year.

Canadian Solar has already set foot in Japan with operations of more than 470 MWp of utility-scale projects that are either operational or under construction, as well as two partnership platforms in Canadian Solar Infrastructure Fund and Japan Green Infrastructure Fund. With an already established position, the latest project introduction is likely to enhance CSIQ’s footprint in Japan when it strives to attain green energy for a sustainable future.

Moreover, buoyed by a strong brand image, differentiated technology and large manufacturing scale, Canadian Solar can look to increase its footprint in the region with more such new projects.

Global Solar Market Boom & Peer Moves

Solar-based energy can be anticipated to gain traction as nations aim to achieve carbon neutrality to combat environmental problems. This is likely to boost solar development projects and the demand for solar components.

Per the report from Fortune Business Insights, the global solar power market is expected to witness a CAGR of 6.9% over the 2021-2028 period. This exemplifies growth opportunities for solar companies with a global footprint. In this scenario, apart from Canadian Solar, solar companies that may enjoy the perks of the expanding global solar market are as follows:

Enphase Energy ENPH enjoys a valuable position in the solar market by manufacturing fully integrated solar-plus-storage solutions. Moreover, ENPH has a strong position as a leading U.S. manufacturer of microinverters. Apart from the United States, the company enjoys a strong footing in Europe, Australia, Brazil, Austria, etc.

Enphase boasts a long-term earnings growth rate of 47.3%. ENPH shares have increased 17% in the past year.

SolarEdge Technologies’ SEDG optimized inverter solutions address a broad range of solar market segments. In the third quarter, the company witnessed record solar revenues, driven by the strong demand for its solar products across all segments and geographies. SolarEdge registered record revenues in 14 European countries, most notably in Germany, the Netherlands, France and the United Kingdom.

SolarEdge’s long-term earnings growth rate is pegged at 31.8%. SEDG has returned 18.8% to its investors in the past six months.

ReneSola SOL continues to benefit from a steady flow of contracts from domestic and international customers. With the successful execution of its downstream strategy, ReneSola is currently expanding its business in international markets. It is committed to adding an incremental project pipeline to its core markets, including the United States, the United Kingdom, Spain, Poland, France, Germany and Hungary.

The Zacks Consensus Estimate for 2022 earnings suggests a growth rate of 34.2% from the prior-year reported figure. SOL shares have increased 10.5% in the past six months.

Price Movement

In the past six months, shares of Canadian Solar have rallied 27.7% compared with the industry’s growth of 58.3%.

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Zacks Rank

Canadian Solar 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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