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Canadian Solar Sells 18 MW of Solar Projects to Sonnedix

Zacks Equity Research

Canadian Solar Inc. CSIQ recently completed the sale of its 18 Megawatt-Peak (MWp) portfolio of Pequeños Medios de Generación Distribuidos (PMGD) solar power projects in Chile to Sonnedix. The projects, located in the Chilean region of Maule and O'Higgins, are expected to commence construction this January and reach commercial operation in the second quarter of 2019.

Per the deal, Canadian Solar will supply 48,600 CS3U-MS KuMax Mono PERC 375W modules to the projects. On completion, the plants are anticipated to generate approximately 35,520 MWh of electricity per year.

Solar Power Prospects in Chile

The solar PV market in Chile is expected to be dominated by new technological developments and constructions for the next three to five years. Per Mordor Intelligence, the Chilean solar market is making its ascent, with nearly one-fifth of all renewable energy coming from solar PV. The market seems prospective as declining costs, improved government policies, private partnerships and various incentive schemes for the use of renewable energy for power generation are driving it.

To this end, it is imperative to mention that the cumulative installed capacity of solar PV in Chile reached 2.38 GW in September 2018, from 12 MWp in 2013. Currently, the aggregate capacity of the 10 largest photovoltaic (PV) solar plants in Chile stands at 1,173 MW. The nation has further announced green targets achievement of 60% by 2035 and 70% by 2050. Per investment banking boutique Prothea, Chile will most likely achieve these targets ahead of its schedule, considering the current pace of deployment of renewable energy technologies in the country.

Such positive developments taking place in Chile must have enticed Canadian Solar to set foot in the country. Going ahead, we may expect the company to make more such agreements in Chile, considering growth potentials of this nation’s solar market.

Global Footprint

Per Allied Market Research, the global solar energy industry is expected to reach $422 billion by 2022 at a CAGR of 24.2% from 2016. Naturally to exploit such growth opportunities of the global solar market, Canadian Solar has been expanding its footprint worldwide.

Apart from the recent project sale in Chile, Canadian Solar in the month of December completed the sale of 20% interest in the 399 MWp Pirapora Solar Complex in Brazil and also closed a $69 million financing with Bancomext and Banco Sabadell for Solar Project in Mexico. During the same month, the company secured a $50-million long-term financing deal for a 100.1 MWp Solar Power Project in Argentina.

Price Movement

Shares of Canadian Solar have rallied 28.5% in the past six months, against the industry’s decline of 21.1%.



Zacks Rank & Other Key Picks

Canadian Solar sports a Zacks Rank #1 (Strong Buy).

A few top-ranked stocks from the same sector are Azure Power Global Ltd. AZRE, Renesola Ltd. SOL and SunPower Corporation SPWR. While Azure Power Global sports a Zacks Rank #1, Renesola and SunPower Corp. carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Azure Power Global recorded average positive earnings surprise of 76.07% in the last four quarters. Its earnings growth estimate for 2019 currently stands at 83.08%.

Renesola recorded average positive earnings surprise of 377.78% in the last four quarters. The Zacks Consensus Estimate for 2019 earnings has risen by 30% to 13 cents in the past 90 days.

SunPower recorded average positive earnings surprise of 53.13% in the last four quarters. Its earnings growth estimate for 2019 currently stands at 75.09%.

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