Canadian Solar Inc.
’s
CSIQ
subsidiary, Recurrent Energy, recently completed the construction of the largest solar plant, the Sunflower Solar station, in Mississippi. With a generation capacity of 100-megawatt (MW) of solar energy, this plant will offer clean energy to 461,000 customers of Entergy Mississippi, a subsidiary of
Entergy Corp.
ETR
.
The Sunflower project, one of the first utility-scale solar projects to be constructed under a Build Transfer Agreement (BTA) in the United States, is the first plant in what will be the largest expansion of renewable power in Mississippi’s history.
Entergy’s Renewable Plan & Canadian Solar
Under the program called EDGE, or “Economic Development with Green Energy,” Entergy Mississippi plans to replace some aging natural gas plants with 1,000 megawatts of renewable energy over the next five years. The Sunflower project, to be owned by Entergy Mississippi for the life of the facility, seems to be part of this EDGE program.
Considering the strategy of the EDGE program, we may witness more such solar facility construction by Canadian Solar for Entergy Mississippi, in the coming days, which, in turn, should boost the former’s revenue growth.
Moreover, in 2021, Entergy Corporation announced plans to triple its renewable energy portfolio over a three-year period. Entergy expects to have 11,000 megawatts of renewable energy generation by the end of 2030. Such renewable expansion plans thus offer ample growth opportunities for solar project developers like Canadian Solar.
Growth Opportunities
Per a Wood Mackenzie report, global solar PV installations are projected to grow at an annual average of 8% from 2022 to 2031 and cumulative solar installations are expected to surpass the 1,000 GWdc threshold, thus providing massive opportunities for solar players like CSIQ.
Many other solar players are also increasingly expanding their footprint in this lucrative market.
For instance, in April 2022,
Enphase Energy, Inc.
ENPH
announced a partnership with ADT Solar, per which the latter intends to exclusively offer Enphase IQ8 Microinverters as part of its comprehensive home energy solution across the United States.
The Zacks Consensus Estimate for Enphase’s 2022 sales suggests growth of 50% from the prior year’s reported figure. The same for 2022 earnings implies growth of 41.9%.
In May 2022,
SunPower
SPWR
announced a collaboration with IKEA US, through which members of the IKEA Family customer loyalty program will be able to purchase home solar solutions, available through SunPower, to generate and store renewable energy and live more sustainably.
The Zacks Consensus Estimate for SunPower’s 2022 earnings suggests a solid growth rate of 414.3% from the prior year’s reported figure. The consensus estimate for SPWR’s 2022 sales indicates growth of 20.8% from the prior-year reported figure.
Price Movement
In a year, shares of Canadian Solar have plunged 22% compared with the
industry
’s decline of 13.1%.
Image Source: Zacks Investment Research
Zacks Rank
Canadian Solar currently carries a Zacks Rank #3 (Hold). You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
.
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