EOSOL Energies Nouvelles? new ground-mounted solar power plant

Canadian Solar Inc. will supply 8 MW of solar modules to EOSOL Energies Nouvelles’ new ground-mounted solar power plant. EOSOL Energies Nouvelles is a major player in the development, investment and production of energy from natural resources and has specialization in solar energy, wind energy, biomass and solar thermal energy.

The new solar power plant to be built by EOSOL Energies Nouvelles will have 39,500 modules installed on an area of 180,000 m² and will have the capacity to generate 10.7 MW of electricity. The plant will be located in Saint-Leger in the south west of France and is expected to be operational in October 2011.

This plant is the fourth project in partnership with Canadian Solar. The company has also provided its high-quality, high-performance solar modules for three earlier installations at EOSOL EN in France. These installations include a 230 kW project in the town of Le Barp in the region of Aquitaine, an 8 MW project in Villeneuve de Marsan in the department Landes and a 5.1 MW project in La Genetouze in the department de Charente-Maritime.

For installation in Saint-Leger in the department of Charente-Maritime, EOSOL EN is also collaborating with TSK, an EPC company, and Abraxa Investment Fund for financing of the project.

Canadian Solar is a low cost, vertically-integrated solar module producer with predominantly China-based manufacturing assets. The partnership with EOSOL EN will bring the company in advantageous position for expanding its business while raising awareness for brand, quality, value proposition and commitment to customer service.

The prospects for Canadian Solar look favorable due to a geographically-diverse customer base, ongoing capacity expansion programs, improving operating efficiencies and material cost savings through its vertically-integrated production structure.

However, off-late, its shipments were impacted by higher solar cell prices in the market, which eroded margins. The company is, therefore, ramping up its captive solar cell capacity. However, it will take some time before the company becomes self-sufficient for its solar cell requirements.

Moreover, any untoward findings in the ongoing SEC investigation will have a detrimental impact on the brand image of the company. The company presently retains a short-term Zacks #3 Rank (Hold) that corresponds with our long-term Neutral recommendation on the stock.

Canadian Solar is expected to release its second-quarter 2011 earnings results on August 17, 2011. The Zacks Consensus Estimates for second-quarter 2011 and fiscal year 2011 are currently at 29 cents per share and $1.10 per share, respectively.

Canadian Solar Inc. is one of the world’s largest solar companies. As a leading vertically integrated provider of ingot, wafer, solar cell, solar module and other solar applications, Canadian Solar designs, manufactures and delivers solar products and solar system solutions for the on-grid and off-grid use to customers worldwide. One of its competitors is Suntech Power Holdings Co. Ltd. (NYSE:STP).