SunPower Corporation (SPWRA) announced that it plans to start the construction of the 25-megawatt McHenry Solar Farm in Modesto before the end of fiscal 2011. During the period of construction, the project is expected to create up to 144 construction jobs and also bring in approximately $18.7 million into the local economy.
The plant will utilize the SunPower Oasis Power Plant product for electricity generation. The Oasis Power Plant product is a fully integrated, modular solar power block that rapidly deploys utility-scale solar projects and is cost effective. It also has the SunPower advanced Tracker Monitoring and Control System (“TMAC”) for wireless control of the power plant.
Each power block integrates the SunPower T0 Tracker with SunPower's high-efficiency, E19 solar panel, pre-manufactured system cabling, the Oasis smart inverter, and the Oasis operating system. The power block kits are shipped pre-assembled to the job site for rapid field installation, and offer the highest capacity factor and the most reliable long-term performance.
The electricity generated by the California based, McHenry Solar Farm will serve the utility grid operated by Modesto Irrigation District (“MID”) and will help the agency to achieve the renewable portfolio standard of 33% from renewable sources. Solar power adds to the diversity of MID's power mix and is an excellent fit for the energy needs of its customers.
The company received approval for the solar PV project from the Stanislaus County planning commission in September, 2011. However, the construction of the facility is subject to the receipt of all remaining building permits, and is expected to be completed and operational by the second half of 2012.
SunPower has the experience and technology to cost-effectively deliver a system that will reliably generate solar power for MID's customers for the next 25 years. Going forward, key drivers of growth are its diversified channel strategy with a strong presence in the residential and commercial market, along with its status as a conversion efficiency leader. The company also has a steadfast focus on spreading its revenue stream by climbing the solar value chain.
However, we are concerned about its higher cost structures vis-à-vis its peers, as well as an oversupply glut of solar panels in the market, subsidy roll back risk in Europe and rising competition. The company presently retains a short-term Zacks #3 Rank (Hold) that corresponds with our long-term Neutral recommendation on the stock.
Based in San Jose, California, SunPower Corp. designs, manufactures and delivers the highest efficiency, highest reliability solar panels and systems. Residential, business, government and utility customers rely on the company's quarter century of experience and guaranteed performance to provide maximum return on investment throughout the life of the solar system. The company mainly competes with Suntech Power Holdings Co. Ltd. (STP).
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