Canadian Solar Inc
.
CSIQ
recently announced that it clinched two 10-year power purchase agreements (PPA) with Axpo Italia for the total capacity of 84 megawatt-peak (MWp) solar projects in a bid to monetize the projects. The move is in sync with Canadian Solar’s aim to boost its revenues through international expansion.
Details of the Agreement
Per the agreement, CSIQ is accountable for the development of two solar projects of 33 MWp and 51 MW capacity, respectively, and expects to commence the construction of the same before 2023. On completion of these projects, Canadian Solar will become the largest solar developer in Italy, thereby further strengthening its position in the European solar market.
After starting commercial operations in January 2024, these projects will be sold to Axpo Italia by Canadian Solar. In this context, it is imperative to mention that before this development, Canadian Solar had signed a PPA with Axpo Italia in April 2021 for a 12 MWp solar project in Italy. This indicates the strong presence of Canadian Solar in the Italian solar market.
Also, the project will assist the region in meeting its climate and clean energy goal target. To this end, it is imperative to mention that the project has the capability to reduce approximately 48,500 tons of CO2 emissions by generating 156 Gigawatts-hour (GWh) of clean energy annually. Additionally, the energy generated will be enough to meet the annual electricity consumption of approximately 61,000 Italian households.
Canadian Solar’sGrowth Prospects in Italy
Canadian Solar has been rapidly expanding its business in overseas markets, including Italy. To this end, the aforementioned agreement opens avenues for CSIQ to clinch more such agreements in Italy as the region boasts huge solar potential, which would aid in the development of solar projects in the region.
Per the report from Mordor Intelligence, the solar market in Italy is expected to witness a CAGR of 7% during the 2022-2027 period. This highlights abounding growth prospects in the Italian solar market. Hence, Canadian Solar’s already established market in this country should benefit the stock’s profitability in the region.
Peer Moves
Considering the aforementioned developments, many solar companies have been investing in Italy to reap the benefits from the nation’s growing solar market. In this context, solar companies who have already tapped the region in a bid to capitalize on growth trends are:
In November 2021,
ReneSola
SOL
announced the launch of a 7 MW ground-mounted solar project in collaboration with Emeren in southern Italy. The two companies expect to develop projects in a broad range of sizes across Italy, with a target of reaching 110 MW shovel-ready projects by 2022.
The Zacks Consensus Estimate for ReneSola’s 2022 sales indicates an improvement of 46.5% over the prior-year reported figure. SOL shares have rallied 40.8% in the past month.
In October 2021,
Enphase Energy
ENPH
announced that it further strengthened its presence in the European residential solar market with its expansion into Italy with the IQ 7 family of microinverters to residential installers across Italy.
The Zacks Consensus Estimate for Enphase Energy’s 2022 earnings has been revised upward by 2.3% in the past 60 days. ENPH has rallied 15.4% in the past year.
SunPower
SPWR
has its largest solar plant in Italy, namely the Montalto di Castro solar photovoltaic (PV) power plant. Montalto di Castro Solar Project is a 51.4 MW solar PV power project that produces enough power for 13,000 homes and avoids 22,000 tons of CO2 emissions per year.
SunPower boasts a long-term earnings growth rate of 15.6%. The Zacks Consensus Estimate for SPWR’s 2022 earnings suggests a growth rate of a solid 457.1% from the prior-year reported figure. SunPower has returned 23.2% to its investors in the past month.
Price Movement
In a month, shares of Canadian Solar have surged 29% compared with the
industry
’s growth of 3.8%.
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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