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Canadian Solar's (CSIQ) Subsidiary Sells 144MW Solar Project

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Zacks Equity Research
·3 min read
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Canadian Solar Inc.’s CSIQ subsidiary, Recurrent Energy, has recently completed the sale of the 144 megawatts alternate current (MWac) Pflugerville Solar project to Duke Energy Renewables, a subsidiary of Duke Energy Corp. DUK. The project is under construction and expected to achieve commercial operation in mid-2021. The energy generated from the Pflugerville Solar project will be sold to Austin Energy under a 15-year power purchase agreement (PPA).

The recent project sale by Recurrent Energy is the fifth utility-scale project sale made to Duke Energy.

A Brief Note on the Pflugerville Solar Project

The Pflugerville Solar project has a generation capacity of 144 MWac, which can generate enough energy to power approximately 27,000 homes. The power plant will utilize approximately 489,600 pieces of Canadian Solar's high-efficiency bifacial BiKu modules across 932 acres in Travis County, TX.

Project Monetization – A Profitable Strategy

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 MWac Suffield solar project to BluEarth Renewables. 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.

Another solar company following a similar strategy is ReneSola SOL, which in December 2020, 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.

Peer Moves

The global solar market, which suffered a setback following the COVID-19 outbreak in March, is steadily recovering and heading toward a positive growth trajectory. This has been encouraging major solar industry players to engage in strategic transactions to expand their footprint in the global solar market.

In October 2020, Sunrun RUN, Zacks Rank #3 (Hold) company, acquired Vivint Solar, creating a company valuation of $22 billion. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Zacks Rank & Price Performance

Canadian Solar currently has a Zacks Rank #4 (Sell). Its shares have gained 36% in the past three months, outperforming the industry’s growth of 32.5%.


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Renesola Ltd. (SOL) : Free Stock Analysis Report
 
Canadian Solar Inc. (CSIQ) : Free Stock Analysis Report
 
Duke Energy Corporation (DUK) : Free Stock Analysis Report
 
Sunrun Inc. (RUN) : Free Stock Analysis Report
 
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