Canadian Solar Inc’s. (CSIQ - Free Report) subsidiary, Recurrent Energy, recently sold its 80% stake in the Crimson storage project to Axium Infrastructure. By retaining the remaining 20% stake, we may expect Canadian Solar getting a share of revenues earned from the plant, thereby bolstering its top line.
The solar plant, with generation capacity of 1.4 GWh (Gigawatt hours), is expected to be operational by summer 2022.
The plant already holds two energy storage contracts with Edison International’s (EIX - Free Report) Southern California Edison and PG&E Corp.’s (PCG - Free Report) Pacific Gas and Electric, under a 10 month and 15-year period, respectively.
Project Monetization: A Profitable Strategy
With the accelerated transition of the electricity generation industry toward a carbon-free environment, solar bigwigs have been aggressively expanding their presence in the rapidly growing solar market, by augmenting their existing scale of operations and diversifying geographically. To capitalize on the trend, solar project developers like Canadian Solar have been engaging in a strategy known as project monetization, which entails developing solar projects and selling them off, thereby boosting their revenues. The latest stake sale in the Crimson project is an example of that.
Canadian Solar has been rapidly expanding its business in overseas markets like the United States, China, Japan, the U.K. as well as emerging markets like Italy, India, Mexico and Germany, among others. With a global battery storage project pipeline of 19 GWh, as of June 2021, a strategy like project monetization will definitely boost the profitability of Canadian Solar. The sale proceeds from such divestitures can be invested by the company in other projects, thereby rapidly expanding its footprint in the solar market.
As part of the strategy, in July, Canadian Solar sold its 328 MWP (Mega-Watt peak) solar project to a leading U.S. annuity and life insurance company in Texas. In August, the company completed the sale of two operational projects totaling 61 MWp to Canadian Solar Infrastructure Fund for $283 million. Earlier, in January, Recurrent Energy completed the sale of the 144 MWac Pflugerville Solar project to Duke Energy Renewables.
Peer Moves
Other solar companies have also been rapidly adopting the project monetization strategy in order to boost their profitability and growth.
For instance, in July 2021, ReneSola Ltd (SOL - Free Report) completed the sale of a 38 MW portfolio of solar projects in Poland and another project worth 12 MW in Hungary in April, to Obton.
Price Movement
In the year-to-date period, Canadian Solar’s shares have gained 17.5% compared with the industry’s growth of 18.9%.
Zacks Rank
Canadian Solar currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Canadian Solar Inc’s. (CSIQ - Free Report) subsidiary, Recurrent Energy, recently sold its 80% stake in the Crimson storage project to Axium Infrastructure. By retaining the remaining 20% stake, we may expect Canadian Solar getting a share of revenues earned from the plant, thereby bolstering its top line.
The solar plant, with generation capacity of 1.4 GWh (Gigawatt hours), is expected to be operational by summer 2022.
The plant already holds two energy storage contracts with Edison International’s (EIX - Free Report) Southern California Edison and PG&E Corp.’s (PCG - Free Report) Pacific Gas and Electric, under a 10 month and 15-year period, respectively.
Project Monetization: A Profitable Strategy
With the accelerated transition of the electricity generation industry toward a carbon-free environment, solar bigwigs have been aggressively expanding their presence in the rapidly growing solar market, by augmenting their existing scale of operations and diversifying geographically. To capitalize on the trend, solar project developers like Canadian Solar have been engaging in a strategy known as project monetization, which entails developing solar projects and selling them off, thereby boosting their revenues. The latest stake sale in the Crimson project is an example of that.
Canadian Solar has been rapidly expanding its business in overseas markets like the United States, China, Japan, the U.K. as well as emerging markets like Italy, India, Mexico and Germany, among others. With a global battery storage project pipeline of 19 GWh, as of June 2021, a strategy like project monetization will definitely boost the profitability of Canadian Solar. The sale proceeds from such divestitures can be invested by the company in other projects, thereby rapidly expanding its footprint in the solar market.
As part of the strategy, in July, Canadian Solar sold its 328 MWP (Mega-Watt peak) solar project to a leading U.S. annuity and life insurance company in Texas. In August, the company completed the sale of two operational projects totaling 61 MWp to Canadian Solar Infrastructure Fund for $283 million. Earlier, in January, Recurrent Energy completed the sale of the 144 MWac Pflugerville Solar project to Duke Energy Renewables.
Peer Moves
Other solar companies have also been rapidly adopting the project monetization strategy in order to boost their profitability and growth.
For instance, in July 2021, ReneSola Ltd (SOL - Free Report) completed the sale of a 38 MW portfolio of solar projects in Poland and another project worth 12 MW in Hungary in April, to Obton.
Price Movement
In the year-to-date period, Canadian Solar’s shares have gained 17.5% compared with the industry’s growth of 18.9%.
Zacks Rank
Canadian Solar currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Buy 5 Stocks BEFORE Election Day
Biden or Trump? Zacks is releasing a FREE Special Report, Profit from the 2024 Presidential Election (no matter who wins).
Since 1950, presidential election years have been strong for the market. This report names 5 timely stocks to ride the wave of electoral excitement.
They include a medical manufacturer that gained +11,000% in the last 15 years… a rental company absolutely crushing its sector… an energy powerhouse planning to grow its already large dividend by 25%... an aerospace and defense standout that just landed a potentially $80 billion contract… and a giant chipmaker building huge plants in the U.S.
Don’t Wait. Download FREE >>
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