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ReneSola Sells Polish Solar Portfolio to Aberdeen Standard

Zacks Equity Research

ReneSola Ltd SOL recently announced that Aberdeen Standard Investments (ASI) — a leading global asset manager — has bought a portfolio of ground-mounted solar farms from the former. The portfolio, with a total installed capacity of 55 megawatts (MW), is located in Poland.

Solar Prospects in Poland

The solar market is still in a nascent stage in Poland, where coal currently accounts for 80% of energy generation. However, in order to meet EU targets on renewable energy, the government of Poland recently turned its focus toward solar power investment.

According to a recent report by European statistical agency Eurostat, renewables constituted 10.9% of Poland’s energy mix in 2017, a figure that needs to increase to 15% by 2020 to meet the EU targets. This reflects growth prospect of the solar market in Poland, attracting solar power developers like ReneSola to set up projects in the country.

At present, Poland has 300 MW of solar capacity installed and the government expects this to increase by 200 MW annually in the coming years. This should encourage ReneSola to further expand its solar portfolio in Poland, like the latest solar farms.

Growth Opportunities

Apart from North America and China, Europe is another prominent market with solid solar prospects. Europe, as a whole, added 11.3 GW in 2018 — a 21% uptick over the 9.3 GW installed in 2017. Realizing robust demand for solar power in Europe, ReneSola has been expanding its footprint over there. Notably, the nation has a considerably active presence in some of the European nations. Of late, the company has expanded its portfolio in Hungary.

ReneSola’s latest pipeline in Hungary has more than 67 micro projects, each with a size of 0.5 MW, bringing the total capacity to approximately 33.6 MW. These micro projects are under construction and shall connect to the grid in 2019. Of the late-stage projects, 21 MW are under construction and expected to be connected to the grid in the fourth quarter of 2019 or the first quarter of 2020.

Monetization of these projects in the coming years should bolster ReneSola’s profitability.

Price Movement

In a years time, shares of ReneSola have declined 33.2% against the industry’s 51.8% rally.

Zacks Ranks & Other Key Picks

ReneSola currently carries a Zacks Rank #2 (Buy). Some similar top-ranked stocks in the same sector are Canadian Solar Inc. CSIQ, Crestwood Equity Partners LP CEQP and JinkoSolar Holding Co. Ltd JKS. While Canadian Solar and Crestwood Equity sport a Zacks Rank #1 (Strong Buy), JinkoSolar carries a Zacks Rank of 2. You can see the complete list of today’s Zacks  #1 Rank stocks here.

Canadian Solar delivered an average positive surprise of 115.66% in the last four quarters. The company’s long-term earnings growth rate is pegged at 32%.

For 2019, the Zacks Consensus Estimate for Crestwood’s earnings climbed a whopping 485% to $3 per share over the past 90 days. The company’s long-term earnings growth rate stands at 5%.

For 2019, the Zacks Consensus Estimate for JinkoSolar’s earnings moved 7.5% north to $3 per share over the past 90 days. The company’s long-term earnings growth rate is pegged at 20%.

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