Canadian Solar (CSIQ) to Supply 226 MWh DC Battery Storage in UK
Canadian Solar Inc. CSIQ recently announced that its majority-owned e-STORAGE will supply 226 Megawatt-hour Direct Current (MWh DC) of turnkey energy storage solutions to ENGIE in the United Kingdom. This should bolster CSIQ’s position in the UK’s energy storage market.
Details of the Project
Per the agreement, e-STORAGE will construct two energy storage projects in Cathkin and Broxburn, Scotland, both of which are scheduled to reach grid connection in early 2025.
The Cathkin and Broxburn BESS projects will employ SolBank, Canadian Solar’s containerized energy storage solution using robust and high-cycle capacity lithium-iron-phosphate cells, active balancing battery management system and efficient thermal management system.
The projects will have a capacity of 56.5 megawatt (MW) / 113 MWh DC each and will be connected to the 33-kilovolt network. It will support more than 40,000 homes and play a significant role in facilitating the UK's transition to net zero emissions by 2050.
Canadian Solar’s Prospects in UK’s Energy Storage Market
The rapidly increasing clean energy adoption is providing a competitive edge to the energy storage market. Consequently, nations across the globe are expanding their energy storage capacity to further boost their clean energy goals, with the UK being no exception.
Canadian Solar is steadily gaining momentum in the U.K. energy storage solar market, with its presence in London and Colchester. As of Sep 30, 2023, Canadian Solar had 20,597 MWh of battery energy storage development project pipeline in the Europe, Middle East and Africa region, which includes the UK. During third-quarter 2023, 24% of the company’s total revenues came from this region.
Such a solid project pipeline is likely to provide meaningful gains to Canadian Solar in the days ahead, which can be further gauzed by a recent projection from the Mordor Intelligence firm. Per the report by Mordor Intelligence, the U.K. energy storage systems market size is expected to grow from 8.85 GW in 2023 to 23.27 GW by 2028, at a CAGR of 21.34% during 2023-2028.
In light of such growth expectations, it is reasonable to assume that Canadian Solar’s expansion plans in the UK could prove to be prudent, including the latest agreement to supply energy storage solutions to ENGIE. This, in turn, should potentially enhance the company’s revenue generation prospects from the EMEA region.
Peer Moves
Other solar players in the industry that are indulging in the expansion strategy to meet the growing demand of the UK’s energy storage market are as follows:
SolarEdge SEDG: The company has a strong presence in the United Kingdom. In October 2023, SolarEdge introduced its latest advancements in the U.K. market. This includes the SolarEdge ONE, a 24/7 energy operating system and the new Commercial Storage System, the highly efficient DC-coupled battery providing 58kWh of battery capacity.
SolarEdge boasts a long-term earnings growth rate of 18.7%. Its share price has surged 14% in the past month.
Emeren Group SOL: As of Sep 30, 2023, Emeren had 360 MWh of storage project pipeline in the United Kingdom. Emeren significantly benefits from its IPP assets, which include the 50 MW UK Branston project.
The Zacks Consensus Estimate for SOL’s 2023 sales implies a rise of 37% from 2022’s reported figure. The consensus estimate for fourth-quarter 2023 earnings implies a rise of 33.3% from 2022’s fourth quarter reported figure.
Enphase Energy ENPH: On Sep 21, 2023, Enphase launched its most powerful Enphase Energy System to date in the U.K. market. The system includes the IQ Battery 5P and IQ8 Microinverters, with a capacity of 5 kWh and a peak AC output power of 384 W, respectively.
ENPH’s long-term earnings growth rate is 18.3%. Its share price has surged 41.8% in the past month.
Price Performance
In the past year, shares of CSIQ have lost 33.8% compared with the industry’s 55.3% decline.
Image Source: Zacks Investment Research
Zacks Rank
Canadian Solar currently has 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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