Canadian Solar (CSIQ) Begins Operation of Three Solar Projects


Zacks Equity Research
Wed, March 8, 2023 

Canadian Solar Inc.CSIQ recently announced that its three solar projects in Japan, Oita Kitsuki, Gunma Takasaki and Yamaguchi Hofu, boasting a capacity of 42 Megawatt-peak (MWp) began their operation in the first quarter of 2023.

The 53,000 MWh of energy generated from the three projects would be enough to power over 15,000 households. Meanwhile, Canadian Solar has also inked deals with various grids under Japan's feed-in-tariff program. This ensures the inflow of revenue for the company from the projects.

Canadian Solar’s Strong Footing in Japan

The company already enjoys a strong footing in Japan with nearly 518 MWp of utility-scale projects in operation or under construction and two partnership platforms in the Canadian Solar Infrastructure Fund and Japan Green Infrastructure Fund.

With the addition of the aforementioned solar projects, Canadian Solar aims to solidify its position in the Japanese solar market and capitalize on the growing solar demand in the region. Its capability to produce efficient modules adds to its competitive advantage in the region.

With the largest and strongest development platforms, Canadian Solar may continue to strengthen its footprint in Japan. This, in turn, may continue to bolster its revenue-generation prospects from the region.

Global Solar Market Boom

The global solar market has been rapidly gaining momentum due to increased focus on adopting renewable sources of energy and lowering the cost of panels complementing the growth. Various incentives and rebates by the government to support the development have been fueling the solar market’s growth.

The strong demand from various channels like roof-top-based solar panels for commercial and residential users and large-scale solar projects like utility-scale solar power plants and solar farms further triggers the penetration of the solar market.

Per the report from Mordor Intelligence, the global solar energy market is expected to grow at a CAGR of 12.7% over a period of 2023-2028 period. Such expanding market size entails promising returns for companies like Canadian Solar that are continuously striving to propel their positioning in the solar market.

Other solar players that have carved out a strong position in the global solar market are:

Enphase Energy ENPH enjoys a valuable position in the global solar market by manufacturing fully integrated solar-plus-storage solutions and microinverters. As of Dec 31, 2022, Enphase shipped more than 58 million microinverters. Currently, more than three million Enphase residential and commercial systems have been deployed across 145 countries.

Enphase boasts a long-term (three-five) earnings growth rate of 45.4%. ENPH shares have rallied 27.3% in the past year.

ReneSola SOL continues to benefit from a steady flow of contracts from domestic and international customers. With the successful execution of its downstream strategy, SOL is currently expanding its business in international markets. It is committed to adding an incremental project pipeline to its core markets, including the United States, the United Kingdom, Spain, Poland, France, Germany and Hungary.

The Zacks Consensus Estimate for 2023 sales suggests a growth rate of 9.5% from the prior-year reported figure. The company delivered an earnings surprise of 400% in the last reported quarter.

SolarEdge SEDG optimized inverter solutions address a broad range of solar markets. The company registered record revenues in 14 European countries and may continue to witness strong growth momentum.

SolarEdge’s long-term earnings growth rate is pegged at 31%. SEDG shares have rallied 11% in the past month.
Price Movement

In a year, shares of Canadian Solar have soared 15% compared with the industry’s growth of 23.6%.