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Canadian Solar Inc. (CSIQ - Analyst Report) inked an agreement for the supply of 85 kilowatt (KW) of solar photovoltaic ("PV") modules to Tanzania-based, Zara Solar. With this deal Canadian Solar will deliver a total of over 350 KW of solar modules for the off-grid PV programs undertaken by Zara Solar.

Zara Solar provides diverse solar products and systems involving retail as well as installation services in Tanzania. Off-grid solar modules in the capacity range of 15 watt (W) to 90 W will be offered by Canadian Solar for the proposed PV projects.

Though access to electricity is still limited to a small cross section of the population, the country numbers among the top ten nations involved in solar power generation. It is a growing market and we believe Canadian Solar’s efforts to reach out to the rural communities through commercial businesses will enable the company to accrue benefits, going forward.

The company, as a manufacturer of sustainable energy solutions, is fast expanding its presence in the emerging markets. Prior to this, the company made a deal with the Turkish government for the delivery of its CS6P-P solar modules for solar plants operating under 500 KW.

Canadian Solar’s North American business also looks encouraging given its recent partnership with Strata Solar for the development of 85 MW solar facilities in North Carolina. It entered into an agreement with Algonquin Power Co. ("APCo"), for the supply of 10 MW AC modules for a utility-scale solar power project in Cornwall, Ontario. Earlier, in Dec 2012, Canadian Solar Inc. had acquired the majority interest in two utility-scale solar power projects in Ontario from SunEdison Power Canada Inc., a subsidiary of MEMC Electronic Materials Inc. .

We believe the company’s drive towards expanding its business globally through multiple ventures will support its broad growth objectives. Solar energy is expected to become a major power source in the future in the wake of strict environmental legislation steadily adopted by governments worldwide.

However, we believe natural gas as a fuel source will continue to provide stiff competition because of its abundant availability. Moreover, declining average selling prices for PV modules owing to a supply glut could impede growth at solar module producers. Canadian Solar currently carries a Zacks Rank #3 (Hold).

Other solar stocks we presently prefer are Zacks Ranked #2 (Buy) Yingli Green Energy Holding Co. Ltd. (YGE - Snapshot Report) and Sempra Energy (SRE - Analyst Report).

Headquartered in Guelph, Canada, Canadian Solar Inc. and its subsidiaries engage in the design, development, manufacture, and sale of solar power products in Canada and internationally.

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