ReneSola Ltd (NYSE:SOL) signed a contract with Obton — an international solar investment company — to divest a portfolio of small-scale DG projects in Hungary.
The portfolio consists of 24 solar plants, with an average size of nearly 0.5 megawatt (MW) per plant and bringing the combined capacity to 13.9MW. These 24 small-scale DG projects are entitled under the Hungarian 25-year feed-in tariff scheme.
Solar Prospect in Hungary
Hungary's solar Photovoltaic (PV) Power Market witnessed improvement in the past year. The European Commission has authorised Hungary’s support scheme for solar and renewable energies. At the end of 2018, Hungary’s solar power capacity was 700MW.
The Ministry for Innovation and Technology (ITM) disclosed that the China National Machinery Import & Export Corporation (CMC) will shortly start building a nearly 100-MW solar power plant in Kaposvár, South-West Hungary. This will be the biggest investment in this area within the Central Europe entirely.
Per a release from Budapest Business Journal, Hungary is undertaking efforts to control emission as part of its long-term plan. Hungary aims to raise the share of renewable energy resources within gross final energy consumption to 20% by 2030. Per the plan, capacity to generate electricity via renewable resources is expected to reach more than 4,600 MW by 2030, including more than 4,000 MW of solar park capacity.
It is evident that Hungary will offer more opportunities to ReneSola and other solar plant operators over the long term.
Global Footprint in Solar Energy
The global PV market continues to surge in 2019 and reflects a year-on-year growth of 17.5% from 2018, per a report by Wood Mackenzie. Additional 114.5 Gigawatt (GW) of newly-installed capacity is anticipated by the end of the year, which will rise to 125 GW from early 2020 onward.
ReneSola is currently expanding its business in the overseas markets like Spain, Canada, Poland, Hungary, France, Vietnam and Turkey. Also, this solar project developer is actively pursuing opportunities in new markets that include South Korea and India.
Considering growth potential in the global solar market, expansion of ReneSola’s project portfolio internationally will likely improve profitability through monetization of projects.
Apart from ReneSola, other potential solar players like Canadian Solar (NASDAQ:CSIQ) , JinkoSolar Holding (NYSE:JKS) and First Solar (NASDAQ:FSLR) are expected to benefit from growth in the global solar market.
Price Performance & Zacks Rank
Shares of ReneSola have declined 19.4% in the past 12 months against the industry’s growth of 41.7%.
ReneSola currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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JinkoSolar Holding Company Limited (JKS): Free Stock Analysis Report
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