Canadian Solar Inc. (CSIQ - Free Report) announced the sale of its 80% stake in the Pirapora I solar power project in Brazil to an EDF Energies Nouvelles affiliate, EDF EN do Brasil.
Details of the Announcement
The 191.5 megawatt-peak (“MWp”) project, located in Minas Gerais, Brazil, has a 20-year power purchase agreement, which offers ample visibility on its top line.
The project is expected to begin commercial operation in third–quarter 2017. Upon completion, it will capable of generating 391,263 MW per year. It is expected to aid in achieving the Brazilian government’s goal of drawing 23% of its total energy from renewable sources by 2030.
Modules for the project will be supplied by Canadian Solar from its new 360 MWp modules factory in Brazil, which had been established solely for catering to the country’s solar demand.
Canadian Solar caters to a geographically diverse customer base spread across key markets in the U.S., China, Japan, the UK and Canada, in addition to the emerging market opportunities in Brazil, India, Mexico, South Africa and the Middle East. The company has a strong pipeline of projects, and it carries out various acquisitions and strategies to further consolidate its position. As of September, the company’s total project development pipeline had a total capacity of 20.4 gigawatt peak.
The company forecasts solar energy to grow from approximately 0.5% of the total global electricity generation to over 10% by 2030.
Increasing awareness of the drawbacks of fossil fuels is spurring the demand for renewable sources of power generation, particularly solar. Per a U.S. Energy Information Administration report (EIA), total renewables used in the electric power sector of the U.S. are expected to increase 9.5% in 2016 and 5.8% in 2017.
Consumption of renewable energy, other than hydropower, is forecasted to grow 11.8% in 2016 and 11.1% in 2017. Solar energy will constitute 1% of the total U.S. utility-scale generation in 2017, indicating immense room for growth. Solar companies are thus benefitting significantly from the boom.
Going forward, rising investments in the solar industry in the U.S. will benefit domestic solar companies like Canadian Solar, First Solar, Inc. (FSLR - Free Report) , SolarCity Corporation and SunPower Corporation (SPWR - Free Report) .
Canadian Solar currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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