Solar photovoltaic (PV) product manufacturer ReneSola Ltd. ( SOL ) has inked a contract with an Indian engineering, procurement and construction (EPC) firm Juwi India Renewable Energies Pvt. Ltd. (Juwi India) to supply 10 megawatt (MW) of its Virtus solar modules to the latter.
Per the agreement, ReneSola will provide the modules in Sep and Nov 2014. The delivery will be rolled out from the company's original equipment manufacturing (OEM) facilities in India. This is in line with India's applicable domestic content requirements (DCR) to use domestically constructed equipments at its homegrown solar projects.
Juwi India will utilize the solar modules at a utility-scale project based in the Indian state of Rajasthan. The project will be constructed by an Indian firm, Atha Group, which is engaged in mining, steel manufacturing, power and renewable energy businesses.
Demand for solar energy has been exponential, particularly in the emerging solar markets of Asia, Africa and Latin America. The Chinese government has been promoting the wide uptake of solar to meet its 2014 solar target of 13 gigawatts (GW).
As per market news, India's Ministry of New and Renewable Energy (MNRE) recently proposed the implementation of a scheme called Ultra Mega Solar. Per the scheme, the government will establish 25 solar parks, utilizing 20 GW of solar PV systems, in the country in the next five years. The MNRE has already identified two sites - Charanka Solar Park in Gujarat and Bhadla Solar Park in Rajasthan - as examples of the parks to be set up. Subsequently, the government will implement its solar farm set up program in each and every state. With more than 300 days of bright sunshine, India's solar program is all geared to take off.
ReneSola is looking to tap this growing Indian market for solar energy. The company launched a new string of inverter products in India in the first quarter of 2014. Earlier, ReneSola had commenced offering locally manufactured PV modules to the Indian market.
Apart from ReneSola, its peer JinkoSolar Holding Co., Ltd. ( JKS ) also has a significant presence in India. In Apr 2014, JinkoSolar inked an agreement with PROINSO India to distribute its products in the Indian market.
We appreciate ReneSola's efforts to maintain its strong foothold in China while expanding its operations in Japan, Germany, India, Italy and the U.K. These initiatives will help the company to win more contracts and boost its revenue stream. Increasing demand worldwide might also push up the prices of solar modules.
ReneSola currently holds a Zacks Rank #1 (Strong Buy). Other stocks in the same sector worth considering include Canadian Solar Inc. ( CSIQ ) and Enphase Energy, Inc. ( ENPH ). Canadian Solar sports a Zacks Rank #1 (Strong Buy) while Enphase Energy carries a Zacks Rank #2 (Buy).
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