Canadian Solar Inc.
CSIQ
recently concluded the sale of two flagship solar farms in New South Wales, Australia, to CalEnergy Resources Limited, thus contributing to the decarbonization goal of New South Wales. Through the agreement, the company aims to boost its earnings through project monetization.
Meanwhile, Canadian Solar also intends to further tap the growth of the rapidly expanding solar market in Australia through more project developments in other areas of the region. To this end, CSIQ inked a multi-year development services agreement with CalEnergy, which will assist the company in enlarging its project portfolio in the region.
Details of the Agreement
The two projects that boast a capacity of 345 megawatt-peak (MWp) have almost reached the completion stage and are bonded with a long-term offtake agreement with a global leading technology company.
Additionally, these projects located in Suntop and Gunnedah are anticipated to provide more than 700,000 megawatt-hour of green electricity yearly for the region, which will be enough to set off more than 450,000 tons of CO2 emissions or 100,000 cars off the road each year.
Hence, such a capacity expansion in New South Wales will aid the region in attaining its goal to achieve 50% reduction in emissions by 2030.
Australia’s Solar Growth Prospects
The solar market in Australia is rapidly gaining momentum due to the region’s decarbonization goals. Of Australia’s total electricity generation in 2021, 32.5% came from renewable sources, thus reflecting growth of 5% from the 2020 levels.
The growth has been largely fueled by favorable policies and expansion goals in the realm of renewables, including the Clean Energy Council’s Integrated System Plan (“ISP”). Per the ISP, a ninefold increase is anticipated in large-scale renewable generation installed in the National Electricity Market, while the small-scale generation may register a fivefold increase by 2050.
Such goals signify bright prospects for companies like Canadian Solar with an already established position in Australia’s solar market to further solidify its presence in the flourishing solar market.
In this context, it is imperative to mention that CSIQ enjoys a lucrative position in Australia with seven development projects. The latest agreement adds to its aim to strategically grow in the region and reap the benefits of the opportunistic solar market in Australia.
Peer Moves
Considering the bright growth prospects of Australia’s solar market, other solar stocks that have already entered into the expanding solar market are
Enphase Energy
ENPH
and
JinkoSolar
JKS
.
In June 2022,Enphase Energy announced that its IQ microinverters in Australia’s solar market witnessed an increase in demand, buoyed by the nation’s solar safety regulations.
The long-term earnings growth rate of Enphase Energy is pegged at 41.3%. ENPH shares have risen 12.2% in the past year.
JinkoSolar’s wholly owned Australian subsidiary provides JinkoSolar with products and services locally, ranging from sales, customer service, supply-chain management to technical and warranty support.
The Zacks Consensus Estimate for JinkoSolar’s 2022 sales suggests a growth rate of 52.9% from the prior-year reported figure. JKS shares have appreciated 13.6% in the past year.
Price Movement
In the past six months, shares of Canadian Solar have risen 6.5% compared with the
industry
’s growth of 11.5%.
Image Source: Zacks Investment Research
Zacks Rank
Canadian Solar currently carries a Zacks Rank #2 (Buy). Another top-ranked stock from the same industry is
ReneSola
SOL
, sporting a Zacks Rank #1 (Strong Buy). You can see
the complete list of today’s Zacks #1 Rank stocks here
.
The Zacks Consensus Estimate for ReneSola’s 2022 sales suggests a growth rate of 34.6% from the prior-year reported figure. The Zacks Consensus Estimate for SOL’s 2022 earnings indicates an upward revision of 18.2% in the past 60 days.
The Zacks Consensus Estimate for ReneSola’s 2023 earnings suggests a growth rate of 79.5% from the prior-year reported figure. Shares of SOL have returned 6% in the past month.
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