Canadian Solar Inc.’s (CSIQ - Free Report) subsidiary Recurrent Energy recently completed the sale of its interests in three solar photovoltaic projects to The Korea Electric Power Corporation (“KEPCO”), a South Korean electric utility giant. The three photovoltaic projects have an aggregate generation capacity of 235 MWac/309 MWp.
Details of the Deal
KEPCO acquired the Astoria (100 MWac/131 MWp), Astoria 2 (75 MWac/100 MWp) and the Barren Ridge project (60 MWac/78 MWp) in Southern California. The acquisitions marks the company’s largest investment made in the U.S. solar market so far.
The acquired projects started commercial operation in 2016 along with clinching long-term power purchase agreements. Post the sale out, Recurrent Energy will offer asset management services to support and manage the three ongoing projects, till the time KEPCO takes over the operations and maintenance charges of the facilities.
Solar Energy Market Holds Promise
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.
Though President Trump is directing his focus toward the augmentation of coal industry, it is evident from projections of U.S. Energy Information Administration (EIA) release that the use of renewable energy (including solar) is going to increase in the United States in the next few years.
In fact, solar energy has emerged as the most popular one among all alternative energy owing to its easy availability and lower solar panel prices. According to the EIA, the nation’s utility-scale solar power capacity will reach 31 gigawatts (GW) by the end of 2018 compared with 21.5 GW in 2016.
Per another report by GTM research, the global solar market will continue to grow to more than 120 GW installations by 2022. Naturally to tap the growth opportunities of the expanding global solar market, Canadian Solar has been expanding its footprint worldwide, which can be supported by the recent sale of its three solar plants.
Shares of Canadian Solar have rallied 18.8% year to date, underperforming the industry’s gain of 59.3%. The underperformance may have been caused by stiff competition from cheaper alternatives like natural gas, given the current shale boom in the United States.
Zacks Rank & Key Picks
Canadian Solar carries a Zacks Rank #3 (Hold).
A few better ranked stocks from the Zacks Oils and Energy Sector are SolarEdge Technologies, (SEDG - Free Report) , Bonanza Creek Energy, Inc. (BCEI - Free Report) and Bill Barrett Corporation . While SolarEdge Technologies and Bonanza Creek Energy sport a Zacks Rank #1 (Strong Buy), Bill Barrett Corp carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
SolarEdge Technologies surpassed the Zacks Consensus Estimate in the last four quarters, with an average surprise of 31.93%. The Zacks Consensus Estimate for 2018 earnings rose by 72 cents to $2.92 in
the last 90 days.
Bonanza Creek Energy has surpassed the Zacks Consensus Estimate in three of the last four quarters, with an average surprise of 188.70%. The Zacks Consensus Estimate for 2018 earnings rose by $1.23 cents to $3.25 in the last 90
Bill Barrett Corp surpassed the Zacks Consensus Estimate in the last four quarters, with an average surprise of 65.24%. The Zacks Consensus Estimate for 2018 earnings rose by 35 cents to 67 cents in the last 90
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