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Canadian Solar (CSIQ) Sells Japan Solar Project for $64M

·4 min read

Canadian Solar Inc. CSIQ recently completed the sale of a Japan-based solar project, Gunma Aramaki, for $64 million. The solar plant, with generation capacity of 19 megawatt-peak (MWp), has been operational since December 2018 and is powered by Canadian Solar’s high-efficiency solar modules.

Following the transaction, Canadian Solar will remain the asset manager and provider of operations and maintenance (O&M) services for the plant under a long-term agreement.

Project Monetization & its Benefits

With a rapidly expanding solar market across the globe, monetization of projects is significantly favoring solar players and boosting their operational performance. Canadian Solar currently caters to a geographically-diverse customer base spread across key markets in the United States, China, Japan, the U.K. and Canada as well as emerging markets in Italy, India, Mexico and Germany, among others. Given its strong global presence, the strategy of project monetization tends to boost this solar player’s profits.

Notably, in September 2020, the company completed the sale of the 23 megawatts-alternative current (MWac) Suffield solar project to BluEarth Renewables. In March, the company had completed a 17.7-megawatt peak (MWp) subsidy-free solar portfolio sale in Italy to Sonnedix, which included the sale of five solar PV plants. Prior to this sale, Canadian Solar completed the sale of Yamaguchi Shin Mine in February 2020, a 56.3 MWp operational solar power plant in the Yamaguchi Prefecture in Japan.

It is evident that as the company continues to expand its customer base worldwide, sale proceeds from these divestments, including the latest one, will add further boost its growth.

Moreover, as Canadian Solar will remain the asset manager and O&M service provider for the Gunma Aramaki project, the company will continue to capture a share of the project's value creation through stable and long-term revenue streams. This in turn is expected to boost this solar player’s operational results.

Another Solar Player Following Suit

Project monetization is a common strategy followed by solar developers these days to earn profits. ReneSola SOL sold a 16-MW portfolio of solar parks in Poland to Modus Asset Management, a renewable energy investment company that invests in the Polish solar market. In June, the company divested its 10.4-MW community solar portfolio to Nautilus Solar Energy.

Price Performance

In a year's time, shares of Canadian Solar have increased 104.4% compared with the industry’s 195% growth.


Zacks Rank & Key Picks

Canadian Solar currently holds a Zacks Rank #5 (Strong Sell).

A couple of better-ranked stocks in the same industry are SunPower Corporation SPWR and Azure Power Global Ltd. AZRE , each carrying a Zacks Rank #2 (Buy) You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

SunPower delivered positive earnings surprise of 49.23%, on average, in the last four quarters. The Zacks Consensus Estimate for 2020 earnings indicates annual growth of 31%.

Azure Power Global delivered positive earnings surprise of 71.15%, on average, in the last four quarters. The Zacks Consensus Estimate for fiscal 2021 earnings indicates annual growth of 70.2%.

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Renesola Ltd. (SOL) : Free Stock Analysis Report
Canadian Solar Inc. (CSIQ) : Free Stock Analysis Report
SunPower Corporation (SPWR) : Free Stock Analysis Report
Azure Power Global Ltd. (AZRE) : Free Stock Analysis Report
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