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SunPower, SRP Dedicate PV Facility

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SunPower Corporation (SPWR) along with its partner Salt River Project (:SRP) dedicated the solar photovoltaic (:PV) power plant at Arizona State University (:ASU) in Mesa, AZ.

This 1 megawatt (MW) solar photovoltaic power plant is the first to commercially utilize SunPower C7 Tracker technology that was introduced in late 2011. This facility will provide sufficient electricity for about 225 residential SRP customers. As per the U.S. Environmental Protection Agency, the system will counteract the production of 1,277 tons of carbon dioxide emissions per year.

SunPower performs engineering as well as construction works on the plant, located in the southeast corner of the ASU Polytechnic campus. The company is also responsible for operating and maintaining the unit.

Under a power purchase agreement, SRP will purchase the full production from the solar plant from SunPower. ASU in turn will buy all the power from SRP for its Polytechnic campus under a separate agreement.

This solar PV tracking system, the C7 Tracker, is unique in the sense that it magnifies the amount of light hitting SunPower’s Maxeon PV cells by seven times to realize a lower levelized cost of electricity. The C7 Trackers use SunPower’s silicon PV cells, which are one of the most capable in the market at a 22.8% efficiency level.

SunPower Corporation is a vertically-integrated solar manufacturer, with a presence along the entire solar value chain from cells through installation. The company is increasing its global market presence within the residential and commercial markets by expanding its network of dealers.

However, over the near term, we are apprehensive about the higher cost structure of the company compared to its peers, the glut of solar panels in the market, lower Average Selling Price (ASPs), subsidy roll-back risk in Europe, rising competition, financial stability of its customers and foreign exchange risk.

SunPower − largely owned by French oil and gas major Total S.A. (TOT) − carries a Zacks Rank #3 (Hold). Other stocks in the solar industry that are currently performing well and have a bright outlook include Canadian Solar Inc. (CSIQ) and ReneSola Ltd. (SOL), both with a Zacks Rank #2 (Buy).

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