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Canadian Solar to Build 367 MWp Solar Projects in Mexico

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Canadian Solar Inc.CSIQ has recently won three solar power projects during Mexico's third Long-term Auction for renewables held on November 15. Totaling 367 megawatt-peaks (MWp), these power projects will be developed and build in the Mexican cities of Aguascalientes, Hermosillo and Obregón.

Once the plants start operating commercially around June 2020, the electricity generated from them will be sold to the Comisión Federal de Electricidad (CFE) under a 15-year Power Purchase Agreement for energy. For Clean Energy Certificates (CELs), the company has a separate 20-year PPA with CFE. The certificates have an average price of $21 per megawatt-hours (MWh).

According to Dr. Shawn Qu, chairman and chief executive officer of Canadian Solar, these latest solar projects in Mexico will expand its late-stage solar project pipeline in the country to 435 MWp. He also added that the company will continue to contribute to the government's goal of increasing electricity generated from clean energy sources to 35% by 2024 and 50% by 2050.

Canadian Solar's International Solar Projects

In October, Canadian Solar announced that its wholly-owned subsidiary has entered into a joint venture (JV) with a few subsidiaries of Menora Mivtachim Holdings Ltd. - one of Israel's five largest insurance and finance groups. The JV aims to invest in the development, financing, construction and ownership of solar power projects in Israel.

Again in the same month, the company announced that it has entered into binding contracts to sell interests in three solar farms to Foresight Solar Fund Limited (FSFL) in Queensland, Australia. These farms have an aggregate capacity of 117 megawatt-peaks (MWp).

In August 2017, Canadian Solar declared that its 27.3 MWp solar photovoltaic (PV) power plant in Tottori Prefecture, Japan has initiated commercial operations. Additionally, the company successfully activated four solar power plants in Japan with combined capacity of 52.5 MWp of green energy in July.

In June, Canadian Solar announced the divestment of 80% stake in Pirapora II solar energy project to EDF EN do Brasil, which is the Brazilian subsidiary of renewable energy market leader - EDF Energies Nouvelles - with commercial operations expected to begin in 2018.

Increasing Focus on Solar Energy

Alternative energy sources have been the primary target of utility service providers owing to rising concerns regarding the consumption of fossil fuel and the subsequent carbon emission. To make most of the situation, each day more utilities are shifting their focus to generation of alternative energy.

With President Trump walking out of Paris agreement in a bid to boost the coal industry, temporarily the focus has shifted to large Asian markets like China, Japan and India, wherein solar market is booming rapidly.

Per a report from GTM Research, the global solar market will hit 85 GW in 2017, nearly doubling the installed capacity of 2014. To capture larger share of this expanding market, solar companies like Canadian Solar have started enhancing their overseas base and the latest JV is one such instance.

Price Movement

Canadian Solar has outperformed the industry in a year. The stock has surged 60.2% compared with the industry's gain of 54.5%. The company's strong pipeline projects along with pertinent inorganic strategies are expected to further consolidate its position in the solar space.

Zacks Rank & Stocks to Consider

Canadian Solar carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the solar space include SolarEdge Technologies, Inc. SEDG , JA Solar Holdings Co., Ltd. JASO and SunPower Corporation SPWR . While SolarEdge Technologies sports a Zacks Rank #1 (Strong Buy), JA Solar and SunPower hold a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here

SolarEdge Technologies delivered a positive earnings surprise of 20% in the third quarter. Its Zacks Consensus Estimate for 2017 moved up nearly 12.2% to $2.11 per share in the last 30 days.

JA Solar pulled off positive earnings surprise in three out of the last four quarters, with an average beat of 574.07%. In the last 30 days, the Zacks Consensus Estimate for 2017 earnings per share moved north by 6.6%.

SunPower came up with a positive earnings surprise of 158.33% in the third quarter. Its Zacks Consensus Estimate for fourth quarter of 2017 climbed nearly 45.5% to 16 cents per share in the last 30 days.

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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 Nasdaq, Inc.


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

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