Canadian Solar (CSIQ) to Build 480 MWh DC Storage Project
Canadian Solar Inc. CSIQ recently announced that Copenhagen Infrastructure Partners (“CIP”) has picked its e-STORAGE unit to deliver the Summerfield battery storage project in South Australia. The Summerfield project comes with a 480 megawatt-hour direct-current (MWh DC) energy storage solution and is expected to be installed in 2025.
CSIQ’s Role in the Project
Per the terms of the agreement, e-STORAGE will provide Engineering, Procurement, and Construction (“EPC”) and Operations and Maintenance (O&M) for the aforementioned battery project.
e-STORAGE's proprietary SolBank's cutting-edge battery technology will be incorporated in the Summerfield project, which will ensure a cost-effective supply of electricity to South Australia, Victoria and the broader national energy grid. After the completion of the project, e-STORAGE will offer long-term operational services to it.
Solar Prospects in Australia
Realizing the need to reduce greenhouse gas emissions like many nations, Australia has also been rapidly expanding its renewable portfolio in recent times. Of late, energy storage has been playing a critical role in constructing a country’s sustainable renewable energy market.
Further, significant funding for building storage projects offered by the Australian government, as well as competitive market design, has bolstered the energy storage market in this nation of late. Impressively, per the Wood Mackenzie analysis published in July 2023, Australia leads the global market for battery energy storage systems, with the total pipeline of announced projects exceeding 40 gigawatts.
Wood Mackenzie expects a 28% increase in the country’s battery storage capacity from now until 2032. Against this backdrop, we believe that the latest agreement comes as a great opportunity for Canadian Solar to reap the benefits of the expanding Australian energy storage market.
Moreover, the company’s battery storage total annual manufacturing capacity for SolBank was 8 gigawatt-hours (GWh) as of Sep 30, 2023, and CSIQ aims to expand the total annual capacity to 10 GWh by 2023-end and 20 GWh by 2024-end. To this end, we may expect the recent contract to supply 480 MWh DC storage to CIP, which will put SolBank a step ahead toward achieving this goal.
How Are CSIQ’s Peers Doing?
Considering the solid energy storage capacity enhancement offered by Australia, other solar stocks that are expanding their footprint in this nation are as follows:
Enphase Energy ENPH: In September 2023, the company announced that it is witnessing the increased deployment of its Enphase Energy Systems, powered by the new IQ Battery 5P and IQ8 Microinverters, in Australia. Impressively, the IQ Battery 5P comes with a 15-year limited warranty, the longest standard residential warranty in the Australian market.
The stock currently boasts a long-term earnings growth rate of 18.3%. Its share price has returned 26.9% in the past year.
JinkoSolar Holdings JKS: In November 2023, the company revealed that it has successfully supplied the renowned Australian distributor, Blue Sun Group, with an impressive 300+ MW of solar modules, complemented by an energy storage capacity of 2488.32 kilowatt-hours (kWh). JinkoSolar leads the way in developing liquid-cooled energy storage systems in the Australian market.
The Zacks Consensus Estimate for JKS’ 2023 earnings calls for an improvement of 108.6% from the 2022 reported figure. The Zacks Consensus Estimate for JKS’ 2023 sales implies an improvement of 34.9% from the 2022 reported figure.
Maxeon Technologies MAXN: In October 2023, the company showcased some of its new products at the All Energy 2023 event. These products included SunPower Reserve, the company's home energy storage system, available for purchase through authorized dealers and installers in Australia. It expects to bring to the market the three-phase version of the SunPower Reserve storage system in 2024.
The stock currently boasts a long-term earnings growth of 39.7%. The Zacks Consensus Estimate for MAXN’s 2023 sales implies an improvement of 7.2% from the 2022 reported figure.
Price Movement
In the past month, shares of Canadian Solar have increased 4.6% compared with the industry’s growth of 9.6%.
Image Source: Zacks Investment Research
Zacks Rank
Canadian Solar currently carries a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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