) is set to expand its base in India by installing a 159 kilowatts
(kW) solar PV micro-grids project to provide electricity to 4,875
people in six villages. SunEdison will work with Rural
Electrification Corporation, a Government of India organization,
and the Madhya Pradesh Urja Vikas Nigam state agency.
Through its SunEdison Eradication of Darkness (SEED) initiative,
SunEdison will begin the construction of the micro-grids with
battery storage in Sep 2014. The construction is expected to be
completed by December. This initiative will not only have a
positive impact on the social lives of the people but also provide
a clean and renewable source of power.
The company's current move bodes well as in the recent 2014
budget, power generation though renewable sources was given high
priority with the Indian Government allocating INR1,000 crore for
the development of solar power plants and solar parks, per Economic
Times. Moreover, per the report, India plans to commission 20,000
megawatts of solar power projects by 2022. Not only that, lower
taxes will be levied on solar power gear makers which in turn will
reduce the cost of solar power panels.
All these projections present SunEdison a huge opportunity to
expand its base in the country. However, there is no dearth of
competition from local solar power providers. Companies such as
Adani Power, Reliance Power, Tata Power, NTPC and Torrent Power are
striving to gain traction in this segment. Moreover, domestic solar
panel makers are rooting for the imposition of anti-dumping duty on
imported solar equipment.
SunEdison remains focused on expanding its geographic reach
through acquisitions and strategic partnerships in different solar
power projects in addition to the Indian project. Recently, the
company acquired a 50% stake in Silver Ridge Power, LLC, a
subsidiary of The AES Corporation, for $178.6 million in cash.
The company's focus on solar projects is a big positive
considering the global demand for solar energy. So it is not
surprising that SunEdison's solar business grew 86.8% year over
year in the last-reported quarter.
Though SunEdison's growing exposure to the solar energy market
is encouraging, project development requires considerable time and
investments. Hence, any delay or inability in selling these
projects at desired prices could affect liquidity. Going forward,
the pricing environment and competition from
First Solar Inc.
) remain the headwinds.
Currently, SunEdison has a Zacks Rank #3 (Hold). Investors can
), which sports a Zacks Rank #1 (Strong Buy).
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