Canadian Solar And SkyPower Team To Develop Solar Power Plants
In a move that will greatly increase their project pipeline in Ontario, Canada., solar manufacturer Canadian Solar (CSIQ :NASDAQ) will be teaming with solar developer SkyPower on approximately 190 – 200 megawatts of solar projects.
Canadian Solar is buying a majority stake in the 16 projects at a total cost of $185 million. 15 of the projects were issued under Ontario’s Feed-In Tariff Program while the other was issued under the Renewable Energy Standard Offer Program. All of the projects were awarded 20-year Power Purchase Agreements from the Ontario Power Authority.
It won’t take long for Canadian Solar to see some returns on its investment as the projects are expected to begin construction in 2013 and be online in 2014. They are expected to generate over $800 million in revenue for Canadian Solar.
By switching to a downstream revenue model, today’s joint venture has the potential to improve the company’s profitability in the long-term. Larger solar manufactures like First Solar (FSLR :NASDAQ) have used this strategy to manage the sales of their panels.
Shares of Canadian Solar were up 1.13 percent in late day trading.