) 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
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
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.
), both with a Zacks Rank #2 (Buy).
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