Canadian Solar announced earlier this month that it has purchased two sections of a SunEdison solar project in Ontario with 24 megawatts. The portion of the project Canadian Solar purchased already has a 20-year power purchase agreement from the Ontario Power Authority through its feed-in-tariff program. Canadian also has a promise from SunEdison that it can buy two more sections with a total of 22.5 megawatts and there could be an option for a third.
“This is a new acquisition for us,” said Paco Caudet, director of sales for Canadian Solar. “But it’s not a new strategy. This is just one project among about 300 megawatts we own so far.”
Canadian Solar has been buying downstream solar projects and building them out with its panels for several years, Caudet said.
“It’s the bridge phase,” he said.
Canadian buys solar projects that are already approved and entering the development stage when they’re ready for panels. Generally, the company does not keep the projects after they’re fully developed. It sells to another company that will own and maintain the solar plant.
While Ontario is currently a hot market for solar because of its attractive feed-in-tariff, Caudet said Canadian is diversified – buying projects throughout Europe and the rest of the world.
“We have a pipeline of projects for two years,” he said.
The company, like SunPower and some of the other more successful solar panel manufacturers, started getting into the downstream development business years ago to ensure there would be demand for its panels.
“There are so many module manufacturers out there,” Caudet said. “You can’t wait for someone to come to you and want to buy.”
Canadian Solar has been successfully creating demand for its product and its downstream business is growing.
“It’s not a majority part of the business yet,” Caudet said.
But it is an important part, especially now when the market is oversaturated and oversupply has driven down costs. Caudet said he expects solar costs will continue to slip, which will ultimately be good for the industry.
Ontario’s feed-in-tariff is important to the company, Caudet said. “But in two years, I believe there won’t be a need for it,” he said.