Canadian Solar Solutions Inc., an operating division of Canadian Solar Inc. (CSIQ - Analyst Report), struck a deal with a fund managed by DIF, whereby the latter will purchase four utility-scale solar power plants in Ontario, Canada. The agreement is subject to customary closing conditions.
The transaction is valued at par with other recent project sales concluded by the company on a per megawatt basis in the Ontario market. Totaling 40 megawatt AC ("MWAC"), the four plants include "BeamLight" in Georgina, "Gold Light" in Pefferlaw, "Illumination" in Scugog and "Glenarm" in Kawartha Lakes.
Construction work is expected to begin in 2013 and 2014 while commercial startup is slated for 2014. Canadian Solar will offer construction, procurement and turnkey engineering capabilities. It will also offer operations and maintenance services after project completion.
The solar plants will be installed with roughly 190,000 Canadian Solar CS6X high-performance modules, which have been through rigorous formal inspections and testing and are internationally certified. The utility-scale solar plants will adequately power around 7,000 homes.
This sale reflects Canadian Solar’s recent strategic shift to sell solar power plants rather than being confined to a photovoltaic (PV) module manufacturer. The company is poised to earn additional revenues from its sale of two utility-scale solar plants to BlackRock in the near term.
Canadian Solar has already secured 1,015 MW of utility-scale solar projects. Recently, the company chose, ABB Inc., to supply a 100 MWAC turnkey solar PV power plant to the previously announced Grand Renewable Energy Project in collaboration with Samsung Renewable Energy Inc. and Connor Clark & Lunn Infrastructure.
The demand upsurge for PV modules in China and Japan will act as principal growth drivers for Canadian Solar. In addition, the company plans to capture the emerging renewable market in the Middle East and tap opportunities in the U.S.
Canadian Solar also hopes to benefit from a recovering solar industry in Europe in 2014, chiefly driven by Germany, the U.K., Italy and France. Currently, the company carries a Zacks Rank #3 (Hold).
However, other solar operators looking more attractive include Zacks Ranked #2 (Buy) First Solar Inc. (FSLR - Analyst Report), Trina Solar Ltd (TSL - Snapshot Report) and Enphase Energy, Inc. (ENPH - Snapshot Report).