If it’s Thursday, Canadian Solar must be doing another deal

Canadian Solar (NASDAQ: CSIQ) said in a March 5 earnings report that it has had a very busy start to this year, with a number of developments relating to sales of projects and work on new ones.

The recent highlights include:

  • On Feb. 17, Canadian Solar announced that it had acquired six solar power projects totaling 46 MW in the United Kingdom. 
  • On Feb. 2, Canadian Solar announced that it had entered into a definitive agreement with Sharp Corp. to acquire Recurrent Energy LLC, a leading North American solar developer, for approximately $265 million. Once completed, the acquisition will increase Canadian Solar’s total solar project pipeline by about 4.0 GW to 8.5 GW, and its late-stage, utility-scale project pipeline by about 1.0 GW to 2.4 GW. Located in California and Texas, Recurrent’s 1.0 GW late-stage, utility-scale solar pipeline is one of the largest utility-scale solar project portfolios scheduled to be built prior to the expiration of the ITC tax credit in 2016 and represents an estimated revenue opportunity of at least $2.3 billion for Canadian Solar under a build and sell business model.
  • On Jan. 29, Canadian Solar provided an update on its late-stage, utility-scale solar energy project pipeline. That pipeline stands at 1.4 GWp, unchanged from 1.4GWp in November 2014 despite the completion of over 100 MWp of projects in Canada and the U.S. during the fourth quarter of 2014. The company has continued to make progress in expanding its solar project pipeline in several geographies, including Japan, the UK and China.
  • On Jan. 22, Canadian Solar announced the sale of the 10 MW (ac) Glenarm solar plant to an affiliate of DIF Infrastructure III.  This plant is valued at over C$60 million (US$49 million) and utilizes Canadian Solar’s CS6X photovoltaic (PV) modules. The Glenarm plant will sell electricity under a 20-year Ontario Power Authority feed-in-tariff contract. It reached commercial operation in November 2014.
  • On Jan. 6, Canadian Solar announced that subsidiary Canadian Solar Solutions had completed the sale of SparkleLight, a 10 MW (ac) solar plant, to a subsidiary of BluEarth Renewables. SparkleLight, which is located in Beaverton Ontario, is the third of four planned solar power plants being acquired by BluEarth from Canadian Solar.
  • On Jan. 5, Canadian Solar announced that Canadian Solar Solutions had completed the sale of two 10 MW (ac) solar plants, DiscoveryLight and FotoLight, to Renewable Energy Trust Ontario Holdings INC/ULC, at a valuation comparable to other recent project sales completed by Canadian Solar on a per megawatt basis in the Ontario market.
  • On Dec. 29, 2014, Canadian Solar announced that Canadian Solar Solutions had closed the sale of the Liskeard 1 solar facility, totaling 10 MW (ac) to TransCanada Corp. The Liskeard 1 facility is located in New Liskeard, Ontario.
  • On Dec. 16, 2014, Canadian Solar announced that Canadian Solar Solutions had completed the sale of the 10 MW (ac) RayLight solar plant to One West Holdings Ltd., an affiliate of Concord Green Energy.
  • On Nov. 24, 2014, Canadian Solar announced that it had completed the sale of the 28.4 MWp West Antelope Solar Park to Dominion Resources. The 263-acre project is located in Los Angeles County on the outskirts of Lancaster, California.
  • On Nov. 18, 2014, Canadian Solar announced that its modules will power a series of projects in Georgia totaling 5.1 MW with Atlanta-based solar developer and EPC provider SolAmerica Energy LLC.

New ‘Yieldco’ now in the company’s plans

Dr. Shawn Qu, Chairman and Chief Executive Officer of Canadian Solar, said: “We continue to execute well on our long-term vision of building Canadian Solar into a leading global solar energy provider. Once we complete the acquisition of Recurrent, our significantly expanded, globally diverse project pipeline gives us additional strategic options to create lasting value for our shareholders. We have been reviewing various options to structure and potentially list our downstream business, and we are now planning to form a YieldCo vehicle, in order to maximize value creation for our shareholders over the long-term. We expect that a YieldCo vehicle and its subsequent listing would enable us to capture the value inherent in our large pipeline of long-term contracted assets and to recycle capital. We are engaged in the process of analyzing the optimal structure for a YieldCo, including the optimal asset profile. We expect to complete the sale of those Canadian projects for which we have an identified end-buyer. We may, however retain other projects that we have developed for eventual inclusion in the asset base of a YieldCo structure or add additional assets from third parties.”

Canadian Solar’s Ontario project pipeline includes:

  • Alfred, 14.1 MW (dc), expected commercial operation in Q4 2015;
  • Illumination LP, 14 MW (dc), commercial operation in Q4 2015;
  • Gold Light LP, 14 MW (dc), commercial operation in Q1 2015;
  • Beam Light LP, 14 MW (dc), commercial operation in Q4 2015;
  • Earth Light LP, 14.1 MW (dc), commercial operation in Q4 2015;
  • Lunar Light LP, 14 MW (dc), commercial operation in Q3 2015
  • Glenarm LP, 14 MW (dc), sale closed, commercial operation in Q1 2015;
  • Aria LP, 14.8 MW (dc), commercial operation in Q4 2015;
  • City Lights LP, 14 MW (dc), commerciial operation in Q1 2015.

The third party Ontario projects involving EPC work, both in construction, are:

  • Samsung Phase I, 133.6 MW (dc), commercial operation in Q2 2015; and
  • Samsung Phase II, 140 MW (dc), commercial operation in Q3 2015.

The Recurrent Energy late stage pipeline, all with expected commercial operation in 2016, includes:

  • Astoria, 131 MW (dc), California;
  • Astoria 2, 100 MW (dc), California;
  • Project A, 78 MW (dc), California;
  • Mustang, 134 MW (dc), California;
  • Tranquillity, 258 MW (dc), California;
  • Project B, 200 MW (dc), Texas; and
  • Project C, 120 MW (dc), California
About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.