ReneSola Ltd SOL recently signed an agreement to sell two ground-mounted solar parks in Romania to Alternus Energy Group. The addition of the twin solar projects with a total generating capacity of 15.4 megawatts (MW) will expand Alternus Energy’s total operating portfolio to nearly 140 MW.
Alternus Energy aims to increase its portfolio in Romania, Poland and Italy. The latest transaction will pave the way for more such deals between Alternus Energy and ReneSola.
Romania’s Solar Prospects
The solar market in Romania has been growing rapidly in recent times, thanks to the encouraging initiatives adopted by the nation’s government for the development of solar power. Notably, in 2018, approximately 13% of the country’s total renewable energy generation capacity was from solar photovoltaic (PV), as stated in a report by Mordor Intelligence.
In 2019, the government of Romania committed before the European Commission to generate 30.5% of the nation’s energy from renewable energy sources by 2030. This must have had attracted solar energy developers like ReneSola to build solar parks in the nation.
Romania’s solar energy market is expected to witness CAGR of 10% in the forecast period of 2020-2025. Considering such growth prospects, we expect ReneSola to get involved in more project construction and subsequent sell-offs like the latest one in Romania.
Project Monetization – A Profitable Strategy
Rapid monetization of projects has been significantly favoring solar players, thereby boosting their operational results, in recent times as the global solar market has been gaining strength. To this end, we notice that ReneSola has been rapidly expanding its business in overseas markets like Canada, Spain, Poland, Hungary, France, Vietnam and Turkey. Also, the solar project developer is actively pursuing opportunities in new markets that include South Korea and India.
Apart from the latest project sale in Romania, ReneSola sold its 16-MW portfolio of solar parks in Poland to Modus Asset Management earlier this month. In November, the company sold its 4.3-MW community solar portfolio to Atmosclear Investments, comprising 1,509 residential rooftop projects. Such deals are likely to improve ReneSola’s profitability through the monetization of projects.
Another solar company following a similar strategy is Canadian Solar CSIQ, which completed the sale of a Japan-based solar project Gunma Aramaki for $64 million, earlier this month. In September, this company had sold the Suffield solar project to BluEarth Renewables.
The global solar market, which suffered a setback following the COVID-19 outbreak in March, has started to recover and is currently on growth trajectory. This has been encouraging major solar industry players to engage in strategic transactions to expand their footprint in the global solar market.
In October 2020, Sunrun RUN acquired Vivint Solar, creating a company valuation of $22 billion. In the same month, First Solar FSLR sealed a deal with Vistra Corp. to supply 869 megawatts-direct current of its Series 6 modules to power five utility-scale solar projects, developed by Vistra.
Zacks Rank & Price Performance
ReneSola currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
ReneSola’s shares have skyrocketed 584.1% in the past year, outperforming the industry’s growth of 225.7%.
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