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Emeren Group (SOL) Buys 10.76 MWh Storage Portfolio in China
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Emeren Group Ltd. (SOL - Free Report) recently completed the acquisition of a 10.76 Megawatt-hour (MWh) energy storage power portfolio from Kunneng Smart Energy Service Group Co. Ltd., in China.
The portfolio comprises six energy storage power stations and is located in the Zhejiang Province. It operates under the Energy Management Services agreements, providing benefits to customers based on energy arbitrage.
As of now, all six facilities are connected to the virtual power plant (VPP) platform. Emeren Group will earn its return on investment primarily from the energy arbitrage, with additional revenues coming from various VPPs.
Emeren’s Prospects in China’s Energy Storage Market
The rapidly increasing clean energy adoption is creating demand for energy storage. Consequently, nations across the globe are expanding their energy storage capacity to further boost their clean energy goals, with China being no exception.
Emeren Group, with a regional presence since 2005, is steadily gaining momentum in China’s energy storage market. As of Sep 30, 2023, the company had 83 MWh of advanced and early-stage solar storage project pipeline in the China region. During third-quarter 2023, 30% of the company’s total revenues came from this region. On Oct 10, 2023, Emeren announced the successful grid connection of its inaugural solar storage project in China.
Such a solid project pipeline is likely to provide meaningful gains to the company in the days ahead, which can be further gauged by a recent projection from Mordor Intelligence. Per the Mordor Intelligence report, China’s energy storage market is expected to register a CAGR of more than 18.8% during the 2024-2029 period.
In light of such growth expectations, Emeren Group’s expansion plans in the country could prove to be prudent, including the latest agreement to supply energy storage solutions to Kunneng Group.
Peer to Benefit
One other solar player in the industry, which is indulging in the expansion strategy to meet the growing demand of China’s energy storage market, is JinkoSolar (JKS - Free Report) .
China has been a dominant market for JinkoSolar, with the region accounting for 40% of its total module shipments. During third-quarter 2023, the company began construction of an integrated project in Shanxi. Phases one and two of this project, with 28 GW wafer-cell-module capacity, are expected to commence production in the first half of 2024.
The Zacks Consensus Estimate for JKS’ 2024 earnings per share implies growth of 8.5% from the previous year’s reported figure. The Zacks Consensus Estimate for 2024 sales indicates an improvement of 8.2% year over year.
Price Performance
In the past six months, shares of SOL have lost 41.7% compared with the industry’s 37.5% decline.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
Emeren Group currently has a Zacks Rank #4 (Sell).
Some better-ranked stocks in the same sector are Constellation Energy Corp. (CEG - Free Report) and Nextracker Inc. (NXT - Free Report) . CEG sports a Zacks Rank #1 (Strong Buy) while NXT carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for CEG’s 2024 sales implies growth of 2% from the previous year's figure. The stock delivered an average earnings surprise of 37.04% in the last four quarters.
The Zacks Consensus Estimate for NXT’s fiscal 2024 sales implies growth of 23.2% from the previous year figure. The stock delivered an average earnings surprise of 43.04% in the last four quarters.
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Emeren Group (SOL) Buys 10.76 MWh Storage Portfolio in China
Emeren Group Ltd. (SOL - Free Report) recently completed the acquisition of a 10.76 Megawatt-hour (MWh) energy storage power portfolio from Kunneng Smart Energy Service Group Co. Ltd., in China.
The portfolio comprises six energy storage power stations and is located in the Zhejiang Province. It operates under the Energy Management Services agreements, providing benefits to customers based on energy arbitrage.
As of now, all six facilities are connected to the virtual power plant (VPP) platform. Emeren Group will earn its return on investment primarily from the energy arbitrage, with additional revenues coming from various VPPs.
Emeren’s Prospects in China’s Energy Storage Market
The rapidly increasing clean energy adoption is creating demand for energy storage. Consequently, nations across the globe are expanding their energy storage capacity to further boost their clean energy goals, with China being no exception.
Emeren Group, with a regional presence since 2005, is steadily gaining momentum in China’s energy storage market. As of Sep 30, 2023, the company had 83 MWh of advanced and early-stage solar storage project pipeline in the China region. During third-quarter 2023, 30% of the company’s total revenues came from this region. On Oct 10, 2023, Emeren announced the successful grid connection of its inaugural solar storage project in China.
Such a solid project pipeline is likely to provide meaningful gains to the company in the days ahead, which can be further gauged by a recent projection from Mordor Intelligence. Per the Mordor Intelligence report, China’s energy storage market is expected to register a CAGR of more than 18.8% during the 2024-2029 period.
In light of such growth expectations, Emeren Group’s expansion plans in the country could prove to be prudent, including the latest agreement to supply energy storage solutions to Kunneng Group.
Peer to Benefit
One other solar player in the industry, which is indulging in the expansion strategy to meet the growing demand of China’s energy storage market, is JinkoSolar (JKS - Free Report) .
China has been a dominant market for JinkoSolar, with the region accounting for 40% of its total module shipments. During third-quarter 2023, the company began construction of an integrated project in Shanxi. Phases one and two of this project, with 28 GW wafer-cell-module capacity, are expected to commence production in the first half of 2024.
The Zacks Consensus Estimate for JKS’ 2024 earnings per share implies growth of 8.5% from the previous year’s reported figure. The Zacks Consensus Estimate for 2024 sales indicates an improvement of 8.2% year over year.
Price Performance
In the past six months, shares of SOL have lost 41.7% compared with the industry’s 37.5% decline.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
Emeren Group currently has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks in the same sector are Constellation Energy Corp. (CEG - Free Report) and Nextracker Inc. (NXT - Free Report) . CEG sports a Zacks Rank #1 (Strong Buy) while NXT carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for CEG’s 2024 sales implies growth of 2% from the previous year's figure. The stock delivered an average earnings surprise of 37.04% in the last four quarters.
The Zacks Consensus Estimate for NXT’s fiscal 2024 sales implies growth of 23.2% from the previous year figure. The stock delivered an average earnings surprise of 43.04% in the last four quarters.