) in collaboration with MidAmerican Solar has begun the
construction of the Antelope Valley Solar Projects (AVSP). The
579-megawatt ("MW") solar projects consist of two co-located
projects in Kern and Los Angeles counties in Calif.
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These big-scale projects are owned by MidAmerican Solar.
Meanwhile, SunPower is the engineering, procurement and
construction contractor. Under a multiyear services agreement,
SunPower will also provide operations and maintenance services
for the plants.
Together these projects form the largest solar power development
that is under construction. On an average, these projects have
the capacity to generate electricity that is sufficient to power
approximately 400,000 homes. Per two long-term power purchase
contracts, the renewable energy generated from these solar farms
will be sold to Southern California Edison, a subsidiary of
The energy generated will eradicate approximately 775,000 metric
tons of carbon dioxide annually. This is almost equal to removing
approximately 3 million cars from the road over the next 20
SunPower is installing the SunPower Oasis Power Plant product at
the sites. Oasis Power Plant product is a fully integrated,
modular solar technology requiring minimal land use. The Power
Plant product uses high-efficiency SunPower solar panels mounted
on SunPower T0 Trackers. The T0 Trackers boost energy capture by
up to 25% because of the strategic placement of solar panels.
Besides being eco-friendly, the projects will fulfill corporate
social responsibility. During the three-year construction period,
approximately 650 workers will be employed. Moreover, it will
contribute more than $500 million to the regional economy. The
construction of the projects is expected to be completed by the
end of 2015.
SunPower Corporation designs, develops, manufactures, markets and
sells high-performance solar electric power technology products,
systems and services worldwide for residential, commercial and
utility-scale power plant customers.
The company is also currently working on the development of solar
projects. Only a few days back SunPower commenced the
construction of twin solar projects in Yolo County, Calif. The
company expects the projects to produce 5.8 MW of emission-free
solar power for county facilities.
Going forward, we like the company's diversified channel strategy
with a strong presence in the residential and commercial market,
along with its status as a conversion efficiency leader. Over the
near term, however, we are apprehensive about the higher cost
structure of the company compared to its peers, the glut of solar
panels in the market, lower average selling prices, subsidy
roll-back risk in Europe, rising competition, financial stability
of its customers and foreign exchange risk.
SunPower carries a Zacks Rank #3 (Hold). Stocks worth considering
STR Holdings, Inc.
), both with a Zacks Rank #2 (Buy).