Canadian Solar: Finally a Canadian Co.?

Canadian Solar wins 176 megawatts of solar from Ontario, a big win for solar company in one of the most promising new markets for solar projects.
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NEW YORK (

TheStreet

) --

Canadian Solar

(CSIQ) - Get Report

announced on Tuesday morning that it has won 176 MW of solar projects under Ontario's new feed-in-tariff scheme for large-scale open field solar. It was a turn of good news for Canadian Solar, downgraded last week by Morgan Stanley and suffering a share selloff on Friday.

Canadian Solar shares were up by more than 1.2% in early trading Tuesday.

Ontario announced last week the first phase of its feed-in-tariff program for solar projects above 500KW, and Canadian Solar has long made known its plans to focus on the opportunity.

In all,

Ontario announced 2.5 gigawatts of renewable energy projects.

Canadian Solar's 176 MW of solar projects in Ontario are slated for completion in 2011 and 2010. The solar company's partners on the projects include

3G Energy

,

Axio Power

,

Saturn Power

and

UC Solar

.

Canadian Solar said in a release that the 176 MW represented 28% of the solar contracts awarded to date by the Ontario program. It's not just the big public solar companies that are big winners in Ontario, though. Private U.S. solar company

Recurrent Energy

was also a big winner in the first round of Ontario's open field solar program.

Canadian Solar currently has just under 700 MW of solar modules installed in more than 30 countries, according to company data. The pressure has been on solar companies since last year to expand the geographic diversity of solar projects as the political environment in Europe supporting solar continues to be volatile.

Last Friday, the German government released new data on the level of solar installations in December -- 1.4 GW in one month -- that

could add fuel to the fire in Germany over lucrative subsidies for the solar industry.

Canadian Solar said its Ontario solar projects were split between those already approved, and those that have received contract offers from Ontario but still await approval. Recurrent Energy was awarded 165 MW of solar projects in Ontario, the majority of which have already been approved for construction.

By 2011 -- when Canadian Solar plans to start construction on solar projects -- Ontario's domestic content requirement will mandate that 60% of a solar project be sourced in Canada. For 2010, the domestic content requirement is 50%.

Canadian Solar said it expects to establish its solar plant in Ontario in the first quarter of 2011 and to employ approximately 500 people. The solar company did not indicate in its release when the plant would be completed, but noted that it will meet Ontario's domestic content requirement in 2010 and 2011.

A big part of the domestic content requirement can be covered by the labor employed in project installation. What's more, inverter companies like

Enphase Energy

are setting up shop in Ontario to work with solar project developers. Inverters sourced in Canada count for 10% of domestic content, and between labor and an inverter, a solar project developer can meet the 50% domestic content requirement in 2010.

-- Reported by Eric Rosenbaum in New York.

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