Ontario-based Canadian Solar Inc. (CSIQ) has completed the sale of two 10-megawatts (“MW”) solar power plants to Renewable Energy Trust Ontario Holdings (“RET”).
The sale of the DiscoveryLight and FotoLight plants is a part of a sales agreement to sell three utility-scale solar power plants from the Ontario pipeline of Canadian Solar to RET. The sale of the third plant is expected to close early this year.
While DiscoveryLight is situated in Beaverton, FotoLight is located in the Township of Prince Edward County. Both plants have started commercial operations and the electricity generated will be purchased by Hydro One under a 20-year Ontario Power Authority feed-in-tariff contract.
Canadian Solar will provide operations and maintenance services to the projects.
The company also stated that the third power plant, CityLights, is slated to commence operations in the first quarter of 2015.
According to a report by the Solar Energy Industries Association (“SEIA”) and GTM Research, in the first nine months of 2014, about 3,966 MW of solar photovoltaic (“PV”) came online in the U.S. and PV installations are projected to reach a capacity of about 6.5 gigawatts (“GW”) in 2014. The SEIA has further projected that PV installations in the U.S. will reach a capacity of 8.5 GW in 2015 and about 12 GW in 2016. Since Canadian Solar enjoys a diversified manufacturing base with its project portfolio in the U.S. and Canada, it will likely benefit from the U.S. solar boom.
Solar demand is rising on a global scale as well. Emerging nations like India and Japan are taking initiatives to promote solar energy. Recently, the Modi government in India raised its solar investment target to $100 billion by 2022. This has increased the interest of the global solar players in the Indian market. Canadian Solar stands to gain immensely from the geographical proximity of China to India. Its China-based operations give it a distinct advantage over its U.S.-based peers like First Solar, Inc. (FSLR), SolarCity Corp. (SCTY) and SunPower Corp. (SPWR).
This Zacks Rank #3 (Hold) company has been posting strong results for the past several quarters. It posted positive earnings surprises in three out of the last four quarters, delivering an average beat of 20.53%. With the expected boom in the solar market worldwide, Canadian Solar will likely witness substantial top- and bottom-line growth in the coming quarters.
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