Canadian Solar Solutions Inc., a subsidiary of Canadian Solar Inc. (CSIQ - Analyst Report), has entered into an agreement for the delivery of 10 MW AC Module to Algonquin Power Co. ("APCo").
Algonquin Power is a builder of sustainable long-term renewable energy projects. The modules will be utilized by Algonquin Power for a utility-scale solar power project in Cornwall, Ontario.
The utility-scale solar plant will include approximately 42,000 Canadian Solar CS6X modules. The high performance CS6X modules carry a warranty period of 10 years on materials and workmanship and a 25 year warranty on linear power output performance. With respect to quality control inspections and testing, these modules have received key international certifications.
The company expects the construction of the solar plant to begin in the second quarter of 2013 and expects it to come online by the fourth quarter of 2013.
Canadian Solar has a successful track record of high quality and reliability with modules backed by a powerful warranty. Recently, the company announced that its 148 MW solar park PV project in southern Brandenburg, Germany was conferred the Solar Project of the Year Award 2012 by POWER-GEN International. The solar complex was constructed on a former lignite mining strip in the East German community of Meuro, near Senftenberg. Canadian Solar provided 636,000 CS6P-P modules, powering nearly 90.0%, 148 MW, of the project's 166 MW total output.
Also, Canadian Solar seems to be committed toward the Ontario solar market. In December last year, Canadian Solar had acquired majority interest in two utility-scale solar power projects from SunEdison Power Canada Inc., a subsidiary of MEMC Electronic Materials Inc. for $38 million. Located in Ontario, these two plants have a total capacity of approximately 24 MW DC. The company has the option to buy two additional utility-scale solar power projects in Ontario with a total capacity of approximately 22.5 MW DC, subject to certain conditions.
Canadian Solar is a vertically-integrated manufacturer of silicon ingots, wafers, cells, solar modules (panels) and custom-designed solar power applications. The company designs, manufactures and delivers solar products and solar system solutions for both on-grid and off-grid use to customers worldwide.
Canadian Solar is a low cost and vertically-integrated solar module producer. The prospects for Canadian Solar look favorable based on a geographically-diverse customer base and improving operating efficiencies through its vertically-integrated manufacturing operation.
However, in the near term, like its peers Suntech Power Holdings Co. Ltd. and SunPower Corporation (SPWR - Analyst Report), Canadian Solar will face the industry-wide oversupply, leading to a sharp fall in average selling Prices, tepid module demand in Europe and rising competition in the market. The company presently retains a short-term Zacks Rank #3 (Hold) that corresponds with our long-term Neutral recommendation on the stock.