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ReneSola (SOL) Acquires Selected Assets of Nova Development

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ReneSola Ltd (SOL - Free Report) has recently acquired certain selected assets, including DG and solar-plus-storage projects, from Nova Development Management for approximately $3.8 million. On the completion of this acquisition, Renesola Power's development pipeline has increased by approximately 200 MW and added an experienced solar project development team.

Rationale Behind the Acquisition

In the United States, residential solar has reached only 3% penetration as of September 2020, which reflects ample scope for growth, going ahead. Impressively, in September, Wood Mackenzie forecasted 37% growth in the nation’s solar installations by the end of this year. This forecast is primarily driven by the strong performance of the utility-scale segment, which is expected to account for more than 18 GW of new installations by the end of 2020.

Further, Wood Mackenzie has forecasted solar installations of approximately 100 GW from 2021-2025 in the U.S. solar market, suggesting 42% growth from the last five years.

Considering such growth prospects of the U.S. residential solar market, the acquisition made by ReneSola seems to be a strategic one to expand its footprint in the aforementioned market and improve the scale of the solar energy development platform.

ReneSola’s Benefits From the Deal

As Renesola continues to focus on expanding the scale of its solar energy development platform, the acquisition deal with Nova Development is expected to strengthen its position in the U.S. solar market and expand footprint in the small-scale utility market.

Alongside adding 200 MW of solar power to the company's existing development pipeline, the acquisition provides Renesola with access to utility projects and development activities in states such as Pennsylvania, California, New York, Maine, Illinois and Arizona. This, in turn, should boost the company’s profit in the coming days.

The inclusion of the new team will also benefit ReneSola as their expertise with the U.S. distributed generation and small-scale utility projects with battery storage will enhance the acquirer’s strength in the U.S. community solar and the European DG market.

A Recent Acquisition Within the Solar Space

The immense growth potential in the U.S. solar market and lucrative expansion opportunities in the overseas markets are prompting solar industry players to engage in mergers and acquisitions. For instance, in October 2020, Sunrun (RUN - Free Report) acquired Vivint Solar, creating a company valuation of $22 billion.

Price Performance

In a year’s time, shares of ReneSola have surged 226.7% compared with the industry’s growth of 180.9%.

Zacks Rank

ReneSola has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Two better-ranked stocks in the same space are Canadian Solar Inc. (CSIQ - Free Report) and SunPower Corporation (SPWR - Free Report) , each carrying a Zacks Rank #2 (Buy).

Canadian Solar delivered average four-quarter earnings beat of 28.26%. The company boasts a solid long-term earnings growth rate of 32%.

SunPower delivered average four-quarter earnings beat of 49.23%. The company boasts a solid long-term earnings growth rate of 34.5%.

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Renesola Ltd. (SOL) - free report >>

Canadian Solar Inc. (CSIQ) - free report >>

SunPower Corporation (SPWR) - free report >>

Sunrun Inc. (RUN) - free report >>