ReneSola LtdSOL has secured 13 utility projects in Southern Poland, with a cumulative capacity of 13 megawatts ("MW"), at the country's inaugural solar power auction.
Details of the Projects
These 13 projects are eligible for a guaranteed tariff of PLN 408.8 per MW-hour ("Mwh"), or $98.74 per Mwh, the highest granted at the auction, and are all expected to be connected to the grid by Dec 2017. These projects have a 15-year power purchase agreement, under which they will sell the electricity generated to the local utility.
The auction was conducted by the Energy Regulation Office of Poland on Dec 30 and subsidies were granted to 76 new solar projects with a cumulative capacity of 70 MW.
According to ReneSola, these projects add to the company's expanding portfolio of diversified solar endeavors across the world. The company's experience and expertise will help it serve Poland's rising energy needs in a reliable and cost-competitive way, and aid the nation's focus on clean energy.
Shares of ReneSola lost 60.8% in the last one year, underperforming the Zacks categorized Solar industry's loss of 52.6%.
The primary reason for this underperformance could be the U.S. Department of Commerce's imposition of anti-dumping duties and anti-subsidy rates on the import of Chinese solar panels, which has adversely impacted ReneSola's revenues since all of the company's production facilities are located in China.
Solar Industry Outlook
Throughout last year, the solar industry has grappled with challenges like declining solar panel prices, weaker power plant contracting activity and increasing regulatory stringency. The industry-wide downturn was owing to a looming glut of solar panels. As solar players continued to step up production in an effort to seize a higher market share, panel supply outweighed demand significantly.
Strong project build-up in the U.S. in anticipation of the Dec 2016 expiration of the solar investment tax credit (which was eventually extended) also played a major role in curbing activity in this space as developers now have more time to build their projects.
Further, the unexpected victory of Donald Trump in the Presidential election does not bode well for the renewable energy space. The President-elect has not only vowed to revive the coal industry but has even called the phenomenon of climate change a "Chinese Hoax".
ReneSola carries a Zacks Rank #5 (Strong Sell). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
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