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ReneSola (SOL) Completes 15.4MW Solar Parks Sale in Romania

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ReneSola Ltd (SOL - Free Report) recently completed the sale of two ground-mounted solar parks with generating capacity of 15.4 megawatts (MW) in Romania, to Alternus Energy Group for approximately $28 million. The sale proceeds from this transaction are expected to get reflected in ReneSola’s fourth-quarter 2020 results.  

Romania’s Solar Prospects

The solar market in Romania has been growing rapidly in recent times, thanks to the encouraging initiatives adopted by the nation’s government for the development of solar power. Notably, in 2019, the government of Romania committed before the European Commission to generate 30.5% of the nation’s energy from renewable energy sources by 2030, as stated in a report by Mordor Intelligence.This must have had attracted solar energy developers like ReneSola to build solar parks in the nation.

Romania’s solar energy market is expected to witness a CAGR of 10% in the forecast period of 2020-2025. Considering such growth prospects, we expect ReneSola to get involved in more project construction and sell-offs like the latest one in Romania.

Project Monetization – A Profitable Strategy

Rapid monetization of projects has been significantly favoring solar players, thereby boosting their operational results. ReneSola has been rapidly expanding its business in overseas markets like Canada, Spain, Poland, Hungary, France, Vietnam and Turkey. Also, the solar project developer is actively pursuing opportunities in new markets that include South Korea and India.

Apart from the latest project sale in Romania, ReneSola signed a contract with Denmark-based solar investment company – Obton - in January 2021 for divesting a portfolio of 20 solar plants in Hungary.  In December, the company sold its 16-MW portfolio of solar parks in Poland to Modus Asset Management, while in November, the company sold its 4.3-MW community solar portfolio to Atmosclear Investments, comprising 1,509 residential rooftop projects. Such deals are likely to improve ReneSola’s profitability through the monetization of projects.

Another solar company following a similar strategy is Canadian Solar (CSIQ - Free Report) , which completed the sale of its two operational projects totaling 61 megawatt-peak (MWp) to the Canadian Solar Infrastructure Fund (CSIF), for $283 million, earlier in March.

Peer Moves

The global solar market, which suffered a setback following the COVID-19 outbreak in March 2020, has started to recover and is currently on a notable growth trajectory.  This has been encouraging major solar industry players to engage in strategic transactions to expand globally.

In October 2020, Sunrun (RUN - Free Report) acquired Vivint Solar, creating a company valuation of $22 billion. In the same month, First Solar (FSLR - Free Report) sealed a deal with Vistra Corp. to supply 869 megawatts-direct current of its Series 6 modules to power five utility-scale solar projects, developed by Vistra.

Zacks Rank & Price Performance

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

ReneSola’s shares have skyrocketed 851.2% in the past year, outperforming the industry’s growth of 191.1%.

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