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Wall Street JournalEN
Why Canadian Solar Stock Was Soaring Today
Key Points
An energy storage unit of the company secured a new supply deal.
The duration of the work is 20 years.
In the energy sector on Wednesday, a north-of-the-border stock was producing the most energy. Canadian Solar (NASDAQ: CSIQ) was having quite a day on the exchange, as investors were bidding its shares up by almost 14% in late-session action. This was on the back of the company's news that it secured a new deal for its energy storage business.
A powerful development
Before market open today, Canadian Solar announced that its e-STORAGE unit had signed a set of agreements with privately held Aypa Power. Under those contracts, the Canadian Solar unit will provide its SolBank energy storage system to a pair of battery energy storage projects run by Aypa in Ontario, Canada's most populous province.
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Image source: Getty Images.
The deal will be in force for some time, assuming it goes fairly well. Canadian Solar said that the two partners had signed 20-year long term services agreements for this work.
The solar company added that delivery is slated to begin in the first quarter of next year, with the aim of launching commercial operations at some point in the first half of 2027. The deal expands an existing business relationship between Canadian Solar and Aypa.
The solar company did not provide any financial details of its new contracts with Aypa.
In for the long haul
As these particulars were lacking, it's difficult to get a handle on how this rather lengthy arrangement will impact Canadian Solar's key fundamentals like revenue or profitability. That said, any time a company secures a 20-year deal to supply its wares, the news is at least mildly positive. The bullish investor reaction and the double-digit share price pop feel entirely deserved.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.