SunPower Corp. (SPWR - Free Report) has installed a 7.5-megawatt high efficiency solar power system on the Lake Pleasant Water Treatment Plant located in the city of Phoenix. This water treatment plant has the capacity to generate 15 billion gallons of tap water each year.
This installation will be the largest and will likely meet 70.0% of the plant’s electrical power needs. Solar power system consists of 22,936 solar panels, which are being used to save approximately 15 million kilowatt-hours (“kWh”) each year. As compared to the conventional kind of electricity, the use of this system will save approximately $4.2 million over a span 20 years.
At the Lake Pleasant Water Treatment Plant, a 6-megawatt ground-mounted solar array will be installed with a SunPower T0 Tracker system. This tracker system will absorb sunlight by more than 25% in comparison to conventional fixed-tilt systems as it positions the solar panels well to follow the sun's movement during the day.
Also, over the next 20 years, the installation of the solar system on an annual basis will offset the production of more than 9,000 tons of carbon dioxide, which is almost equal to removal of approximately 35,800 cars from roads.
The installation of the system is not expected to face any financial hurdles, going forward. Through a solar services agreement with SunPower, the city of Phoenix will finance the system. Per the agreement, Wells Fargo & Company (WFC - Free Report) will own the system, which is designed, built, operated and maintained by SunPower. The electricity generated from the project will be bought by the city of Phoenix at rates that are competitive with the retail electricity. In order to fulfill the state's renewable energy standard, the renewable energy credits associated with the system will be transferred to Arizona Public Service (“APS”).
This is not the first time that SunPower is working for the city of Phoenix. SunPower has also placed 5.4-megawatts of power at Sky Harbor and 100-kilowatt systems at the Phoenix Convention Center and the Burton Barr Central Library.
Currently, solar projects located at Phoenix are generating 13 megawatts of electricity that is sufficient to power approximately 2,600 homes on an annual basis. The solar system produces clean energy for the coming years while enabling reduction of operational expenses significantly.
SunPower seems to be working well on solar energy projects worldwide. In December last year, SunPower has extended its long-standing supply agreement with Toshiba through 2018. Pursuant to the supply agreement, SunPower would provide over 100 megawatts of its highest efficiency residential solar panels annually exclusively to Toshiba. Toshiba would offer solar systems with SunPower's highest efficiency solar modules in the rapidly growing Japanese residential market.
Again in December, SunPower had made announcement for the construction of two South African ground-mounted solar power projects near Douglas, South Africa in the Northern Cape Province in collaboration with AE-AMD Renewable Energy.
Based in San Jose, California, SunPower designs, manufactures and delivers the highest efficiency, highest reliability solar panels and systems available today. SunPower’s customer base is spread across North America, Europe, the Middle East, Asia and Australia.
SunPower is proactive in entering new markets. In addition to a sizeable presence in the US, it is already focusing on improving market share in France, Germany, Italy, Spain and Japan, while gaining new market share in the emerging markets like England, Greece, Israel and Malta. The company presently retains a short-term Zacks Rank #1 (Strong Buy). We have a long-term Neutral recommendation on the stock.