Canadian Solar Inc.’s (CSIQ - Free Report) share price increased 5.5% over the prior session to close at $38.87 on Feb 7, on the back of positive market sentiments relating to its sale of a solar power plant.
Canadian Solar’s subsidiary Canadian Solar Solutions Inc. has signed a contract with a fund managed by BlackRock, Inc. (BLK - Free Report) to sell Oro-Medonte ("Oro"), a utility scale solar power plant, to the latter. This is the company’s fourth solar plant sale contract with BlackRock.
The plant, located in the Township of Oro-Medonte, has a total electric generation capacity of 10-megawatt (“MW”) AC.
Per the agreement, Canadian Solar will provide turnkey engineering, procurement and construction ("EPC") services to complete the project. After the completion of the project, the company will offer operations and maintenance ("O&M") support. Canadian Solar will utilize 38,763 Canadian Solar CS6X high-performance modules in the power plant.
Canadian Solar is scheduled to start development of the power plant in first-quarter 2014 and expected to be operational in third-quarter 2014. The plant will provide emission-free power to approximately 1,339 homes annually. Also, the project is expected to generate over 150 new jobs during its development and construction phase.
We remind investors that Canadian Solar’s share price surged in the previous occasion as well when the company inked a deal with a fund managed by BlackRock to sell a 10-MW utility-scale solar plant in Ontario on Jan 27, 2014. The company has a strong relationship with BlackRock and frequently wins orders from the latter. Earlier, BlackRock purchased power plants, including set ups based at Demorestville and Odessa in Ontario, from the company.
We note that the demand for renewable energy is gradually rising, primarily on the back of an increasing awareness among the people regarding its benefits; thereby influencing utility providers to shift to alternate clean energy from fossil fuels. As solar energy is a major alternative energy resource, the solar product manufacturers are currently expanding their operations to capitalize on the aforesaid opportunity.
Canadian Solar currently has a Zacks Rank #1 (Strong Buy). Other players in the solar industry looking equally good include First Solar Inc. (FSLR - Free Report) and JinkoSolar Holding Co., Ltd. (JKS - Free Report) , each with a Zacks Rank #1 (Strong Buy).