China-based ReneSola Ltd. (SOL) declared that it will be expanding its North American operations. The company has opened offices and warehouse facilities in Mexico and Canada.
One major reason for setting up offices in Mexico and Canada is the recent developments in the region. Mexico expects to generate about 35% energy from renewable sources by 2024. In fact, it is expected that the solar market’s installed base will quadruple to 240 megawatts by 2014 end. Also, Canada has done away with the need for solar projects to be powered by domestic content in the third phase of its feed-in tariff program. This has further opened up avenues for the company.
Going forward, this expansion will help the company to capitalize on the growing solar market. Demand for solar energy is on the rise given the increasing awareness to promote clean energy.
Apart from North America, the company is also gradually expanding its footprint in the Asian, African and European markets. Higher solar demand from European countries and Japan is currently driving the demand surge. In third-quarter 2014, module shipments to Europe and Japan comprised 72% of total shipments, up from 54.7% in the previous quarter.
We notice serious efforts of lowering emissions on a global scale. The U.S. and China have inked a deal to limit greenhouse emissions. China is aiming to increase the share of clean energy sources to 20% by 2030. On the other hand, the U.S. has pledged to reduce emissions by 26% to 28% in 2025 as compared to 2005 levels.
In October, the European Union too declared that it will reduce emissions 40% by 2030 as compared to 1990 levels. Increase in global demand for alternative sources of energy will surely boost the company’s revenues, going forward.
ReneSola’s peers, namely, JinkoSolar Holding Co. Ltd. (JKS), Trina Solar Limited (TSL) and Yingli Green Energy Holding Co. Ltd. (YGE), are also strengthening their global presence with rising demand for clean energy.
ReneSola carries a Zacks Rank #4 (Sell).
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