Canadian Solar Inc (CSIQ - Free Report) announced that its wholly-owned subsidiary, Recurrent Energy, has signed a 15-year Power Purchase Agreement (PPA) with Peninsula Clean Energy. Per the agreement, Recurrent Energy will supply 100 megawatts of new solar power to Peninsula Clean Energy from its Mustang Two solar photovoltaic project in Kings County, CA.
The project is expected to commence its commercial operation in 2019.
What’s in it for Canadian Solar?
Peninsula Clean Energy is the official power supplier of San Mateo County, CA. It provides customers the choice of receiving electricity from clean, renewable sources at competitive rates. Customers can choose from its ECOplus option which is 50% renewable and 75% greenhouse gas emissions free or ECO100 option that is 100% renewable and 100% greenhouse gas emissions free.
With increasing focus on renewable resources as a more viable option for energy, such agreements are likely to boost prospects of energy providers like Canadian Solar. Notably, through the aforementioned PPA, Canadian Solar will be able to cater to more customers, which in turn is expected to bolster revenue growth.
With growing demand for solar energy in particular, the company has made notable progress in the recent time. In August, Canadian Solar announced that its 27.3 megawatt-peaks (MWp) solar photovoltaic (PV) power plant in Tottori Prefecture, Japan has initiated commercial operations from Aug 10, 2017. (Read More: Canadian Solar Energizes New PV Solar Plant in Japan)
Increasing Focus on Solar Energy
Alternative energy sources have been the primary target of utility service providers due to rising concerns regarding the consumption of fossil fuel and the subsequent carbon emission. To make most of the situation, each day more utilities are shifting their focus to generation of alternative energy.
Solar energy, among all other alternative energy, has emerged as the most popular one due to its easy availability and declining price of solar panels. According to the U.S. Energy information Administration (EIA), the nation’s utility-scale solar power capacity will reach 31 gigawatt (GW) by the end of 2018 from the 2016 level of 22 GW.
New Orders for Solar Companies
Realizing the importance of solar energy, major players in this space like Canadian Solar, JA Solar Holdings (JASO - Free Report) , ReneSola Ltd. (SOL - Free Report) , JinkoSolar Holding Company Ltd. (JKS - Free Report) etc. have been inking agreements with domestic customers as well as foreign allies to expand their business manifold.
To this end, JinkoSolar announced recently that its subsidiary, JinkoSolar Canada Co. Ltd., has agreed to supply 17 Megawatts (MW) solar PV modules to Borea Construction ULC. (Read More: JinkoSolar to Supply Solar Modules to Brooks Solar Project)
Moreover, ReneSola announced that it has inked an agreement to sell a solar project in North Carolina to a subsidiary of Panda Green Energy Group Ltd., a leading investor and operator in the renewable energy sector. (Read More: ReneSola Sells Solar Project to Panda Green Energy's Unit)
In the past year, Canadian Solar has outperformed the industry. The company’s shares have advanced 36.1% compared with the industry’s gain of 17.2%.
Canadian Solar’s strong pipeline of projects along with pertinent inorganic strategies will further consolidate its position.
Canadian Solar 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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