China-based Trina Solar Limited (TSL) declared that its 90-megawatt (“MW”) solar power plant in Toksun, Xinjiang province in China has been connected to the grid and is ready to commence operations.
The 90-MW solar power plant will be able to generate about 118 million kilowatt hours of electricity annually. It will also help in reducing about 108,300 tons of carbon dioxide emissions and ensuring a cleaner environment.
About 300,000 modules manufactured by Trina Solar have been installed in the solar plant. Trina Solar’s modules are highly efficient and the company spends a substantial amount on research and development (“R&D”). In the third quarter of 2014, the company spent as much as $5.5 million on R&D, up 25.7% from the prior-year quarter. Recently, the company’s multi-crystalline silicon photovoltaic (“PV”) module reached a record power output of 324.5 watt-peak (read: Trina Solar Ltd. Shares Rise on Record Power Output).
Apart from its R&D focus, the company is aiming to strengthen its downstream business. In Dec 2014, the company entered into an agreement to acquire a 28% stake in Shuntai Leasing Company Limited, a financing institution. This will help Trina Solar to finance its downstream and solar manufacturing businesses, thereby reducing its near-term cash requirement for project development and capital investment.
However, like its peer ReneSola Ltd (SOL), Trina Solar will likely face increased pressure in maintaining revenue growth in the light of import duties to be imposed on Chinese solar products by the U.S. Department of Commerce (“DOC”). Anti-dumping duties, as determined by the DOC, will range from 26.71% to 78.42% on imports of most China-made solar panels, along with anti-subsidy duties of 27.64% to 49.79%. Although final decisions are yet to be made, the companies’ top lines will be severely hurt if the proposed duties are levied.
In the past one year, Trina Solar’s share price fell by about 42.8%.
Trina Solar currently has a Zacks Rank #4 (Sell). Better-ranked stocks in the same sector include JA Solar Holdings Co., Ltd. (JASO) and STR Holdings, Inc. (STRI). While JA Solar sports a Zacks Rank #1 (Strong Buy), STR Holdings carries a Zacks Rank #2 (Buy).
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