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Duke Energy Acquires Canadian Solar's Rambler Solar Project

Zacks Equity Research

Duke Energy Corp.’s DUK subsidiary, Duke Energy Renewables, recently bought a Texas-based solar project from Recurrent Energy, which is a subsidiary of Canadian Solar CSIQ, to enhance its solar energy portfolio. The project, named Rambler, with a generation capacity of 200-megawatt (MWac) / 266-megawatt peak (MWp), is expected to be commercially operational in mid-2020.

The project will utilize more than 733,000 of Canadian Solar's high-efficiency bifacial BiKu modules to power 40,000 homes.

Why Choose Canadian Solar?

Per the U.S. Energy Information Administration (EIA), Texas produces more electricity than any other state in the country, generating almost twice as much as Florida, which is the second-highest electricity-producing state. As most U.S. states are shifting toward renewables, the solar market opportunity has expanded in Texas, of late, with solar and wind particularly enjoying dominance. Evidently, Texas is poised to become a nationwide leader in solar energy production, with more than 4 GW of capacity expected to be installed over the next five years, per a Solar Energy Industries Association data.

Therefore, solar project developers like Canadian Solar are expanding their footprint across Texas. Like other utilities, Duke Energy is transforming itself into a clean energy utility, and hence partnered appropriately with Canadian Solar to achieve this goal.  

Notably, over the past nine years, Duke Energy and Recurrent Energy have partnered on six solar projects, including the latest one. As Recurrent Energy continues to lead solar energy development in Texas, possessing more than one gigawatt of contracted projects in the state, Canadian Solar surely seems to be a prudent choice for Duke Energy.

Looking Ahead

From a nation-wide perspective, solar energy generation in the United States is expected to increase 13.1% to 303,000 MWh/d in 2019 from 268,000 MWh/d in 2018, per the U.S. EIA. Moreover, the International Energy Agency (IEA) anticipates 17% average annual growth of solar power generation between 2017 and 2030. Such projections should encourage Duke Energy to further expand its solar energy portfolio through project acquisitions, like the latest one.

In line with this, other utility companies like NRG Energy NRG and The AES Corporation AES are also eyeing significant solar expansion opportunities in the United States.

Zacks Rank and Price Movement

Duke Energy currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Shares of the company have rallied 21.3% in the past 12 months compared with the industry’s growth of 17.3%.

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