SunPower Starts Twin Calif Projects - Analyst Blog

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SunPower Corp. ( SPWR ) has commenced the construction of twin solar projects in Yolo County, Calif. The company expects the projects to produce 5.8 megawatts ("MW") of emission-free solar power for county facilities.

The venture calls for the construction of two systems, one at the corner of West Beamer Street and Cottonwood Street in Woodland and the other at Grassland Regional Park in Davis, Calif. The company expects to wrap up construction by the third quarter. This will likely save $1.5 million in electricity costs for the county in the first year of operation.

The county will own both the new facilities. SunPower's presence in Yolo county dates back to 2010, when it built the county's first solar power system. It was a 1-MW ground-mounted system at the Yolo County Justice Center in Woodland, Calif.

The latest deployment of SunPower's systems in the region is expected to generate savings of around $51 million over the next 25 years. The 5.8MW solar project would help displace 5,600 tons of carbon dioxide emissions each year. This is tantamount to removing 26,000 cars off the roads of California over 25 years of the two solar farms' operations.  

Moreover, these ground-mounted solar power systems will use the company's solar panels. SunPower is believed to hold the most capable solar panels on the market. Notably, in Davis, the system will operate SunPower panels that are mounted on the SunPower T0 Tracker system. The Tracker helps capture 25% more sunlight than conventional fixed-tilt systems because of its ability to follow the sun's movement. This sharply cuts down on costs and requires less land usage.

We are optimistic about SunPower's presence along the entire solar value chain from cells through installation. Going forward, we are bullish on the company due to its diversified channel strategy with a strong presence in the residential and commercial market, along with its status as a conversion efficiency leader.

The leading U.S. manufacturer of silicon-based solar panels, SunPower is largely owned by French oil and gas major Total S.A. ( TOT ).

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). Other stocks in the solar industry that are currently performing well and have a bright outlook include Canadian Solar Inc. ( CSIQ ) and ReneSola Ltd. ( SOL ), both with a Zacks Rank #2 (Buy).



CANADIAN SOLAR (CSIQ): Free Stock Analysis Report

RENESOLA LT-ADR (SOL): Free Stock Analysis Report

SUNPOWER CORP-A (SPWR): Free Stock Analysis Report

TOTAL FINA SA (TOT): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: CSIQ , SOL , SPWR , TOT

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