Canadian Solar Inc. CSIQ recently announced that its unit, CSI Energy Storage, has inked an agreement with UBS Asset Management's Real Estate & Private Markets business in North America. Per the deal, CSI Energy Storage will provide 2.6 gigawatt-hour (GWh) of battery solutions for the build-out of energy storage projects managed by the latter.
The agreement tends to assist Canadian Solar in expanding its battery storage project pipeline and boosting its revenue generation prospects from the energy storage business.
Growth Prospects of Battery Storage Solutions
Underpinned by the net-zero-emission target, the storage solution market’s growth in the United States may witness a northward trend due to new amendments in incentives and rebates that support the development and assist in accelerating its pace.
The U.S. government aims to power homes, businesses and communities with clean energy by 2030 by deploying 2,300 grid-scale battery plants. Such an ambitious target signifies the probable increased demand for an efficient battery storage solution.
In such a scenario, Canadian Solar’s battery solution business may continue to gain momentum. In September 2022, the company launched SolBank and claims it to be one of the safest and most reliable systems for utility-scale applications and boasts up to 2,800 kilowatt-hours (kWh) of usable energy capacity.
As of Sep 30, 2022, CSI Energy Storage's total pipeline was 25 GWh. Moreover, CSI Energy Storage intends to tap the probable growth in the battery storage market by scaling up its battery manufacturing capacity from 2.5 GWh to 10 GWh by the end of 2023.
Scaling up the production volume seems wise when the company continues to clinch large battery solution deals. Given the high probability of the increasing adoption of clean energy, the demand for battery storage solutions will continue to increase in the United States. Thus, CSIQ will be able to benefit from its high-quality battery storage offering and available battery storage to meet the demand.
Solar companies that have an established position in the battery storage market and can enjoy the perks of the increased demand are as follows:
Enphase Energy ENPH enjoys a valuable position in the solar market by manufacturing fully integrated solar-plus-storage solutions. The company plans to introduce its IQ Battery 5P later in 2022. This battery will deliver twice the power of the current battery at a lower manufacturing cost, enabling homeowners to start heavier loads.
Enphase boasts a long-term (three to five years) earnings growth rate of 47.4%. ENPH shares have rallied 27.7% in the past year.
SunPower’s SPWR battery storage system, SunVault Storage, provides whole-home backup. It offers double the energy as previous iterations with 26 kWh and 52 kWh configurations. Its features include maximum energy savings with powerful charge and discharge during peak rate times, larger battery capacity and battery stability for maximum safety and efficiency.
The Zacks Consensus Estimate for SPWR’s 2022 earnings suggests a growth rate of a solid 328.6% from the prior-year reported figure. SunPower has returned 40.9% to its investors in the past six months.
SolarEdge SEDG is a provider of lithium-ion batteries and integrated energy storage solutions. In May 2022, SEDG announced the opening of Sella 2, which is a 2 GWh battery cell manufacturing facility. Sella 2 is expected to ramp up production during the second half of 2022.
SolarEdge’s long-term earnings growth rate is pegged at 31.8%. SEDG shares have rallied 15% in the past six months.
In the past six months, shares of Canadian Solar have soared 22.1% compared with the industry’s growth of 55.9%.
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Canadian Solar currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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