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Solar Energy Prospects Expand in Brazil: 4 Stocks in Focus

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Brazil is known for its extremely favorable conditions for the production of energy through photovoltaic (PV) systems. Notably, per a report by Clean Energy Latin America (CELA), the country’s lowest solar irradiation is better than most of Europe’s highest.

As a result, throughout 2019, solar stood out as the most competitive energy source among all renewables in the nation.

Recent Solar Developments in Brazil

Considering the abundant prospects of the Brazilian solar market, companies across the globe have identified the nation as a lucrative hub for investments. Evidently, the Brazilian PV sector has attracted more than BRL 16.15 billion in cumulative investments since 2012, while generating about 182,000 jobs in the country.

These investments along with falling PV costs and surging power prices are boosting the solar installation rate in Brazil, thereby expanding its solar footprint. In July 2020, Brazil surpassed the 6-gigawatt (GW) mark for installed solar power, according to the latest data from the Brazilian Association of Photovoltaic Solar Energy (ABSOLAR).  

Earlier, in March 2020, Brazil welcomed its largest solar plant, the Atlas Casablanca solar plant with an installed capacity of 330MW, equipped to produce enough energy to supply a city of 1.4 million inhabitants.

What’s Ahead?

In June 2020, the Brazil's Ministry of Mines and Energy (“MME”) said it expects more than 8,000 MW of solar capacity to be added over the next 10 years, courtesy of a new protocol for the issuance of green debentures. Further, the installed Solar PV capacity in Brazil is expected to reach to 14GW in 2026 and 125GW in 2040.

Stocks in Focus

Let’s take a look at a few solar companies that have already forayed into the Brazilian solar market and are expected to expand footprint in the time to come.

Canadian Solar (CSIQ - Free Report) , a Zacks Rank #3 (Hold) company, signed two private power purchase agreements (PPA) in June 2020, with Braskem S.A. and COPEL Energia for a total of 274 MWp in solar power projects in Brazil. This was the first PPA signed directly between Canadian Solar and an industrial customer in Brazil and sets another landmark for Canadian Solar in this market. Both these projects will use Canadian Solar's high efficiency bifacial BiHiKu modules. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

JinkoSolar (JKS - Free Report) and Aldo Solar announced a long-term partnership in January 2020, which was beneficial for the former, as its mono perc Cheetah half cell 400 W solutions will be marketed and distributed by Aldo Solar throughout Brazil. Following the deal, the company’s operations in Brazil began in 2012 and the Zacks Rank #3 company has already built a strong position in the country.

Renesola (SOL - Free Report) , a Zacks Rank #2 (Buy) company, had supplied its solar PV modules to a solar PV project in southern Brazil in December 2019.

In August 2019, SolarEdge Technologies (SEDG - Free Report) , a Zacks Rank #3 company, announced expansion in the Brazilian PV market with the introduction of its residential and commercial DC optimized inverter solutions. SolarEdge also introduced its residential PV portfolio to the Brazilian market, which includes its single-phase inverters with HD-Wave technology, smart energy suite and EV charging single-phase inverters.

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