Zacks Small Cap Analysis – SUUN: The longer term is vivid! Initiating protection of an rising photo voltaic developer and energy producer – Buzz Credit score

By Brian Lantier, CFA

NASDAQ:SUUN

READ THE FULL SUUN RESEARCH REPORT

SolarBank (NASDAQ:SUUN) is a vertically built-in photo voltaic and battery vitality storage system (BESS) undertaking developer, engineering, procurement, development service supplier (EPC), and unbiased energy producer (IPP) principally targeted on neighborhood photo voltaic and company initiatives in New York and Ontario. As the corporate strikes into 2025 it is going to broaden its choices to incorporate a better give attention to working its personal photo voltaic and BESS belongings as an IPP and the design and constructing of battery vitality storage methods (BESS) to satisfy the rising demand for electrical energy pushed by broad electrification efforts (together with better EV penetration charges) and knowledge heart initiatives.

The corporate has a possible improvement pipeline of over 1 GW of photo voltaic capability at numerous levels of improvement and has delivered initiatives thus far with a complete capability of greater than 200 MW. The corporate has roughly 25 MWp and 60 MWh of photo voltaic and BESS initiatives underneath development with one other 149 MWp of photo voltaic at present in late-stage improvement. We consider that the corporate intends to roughly triple its owned and working photo voltaic and BESS capability within the subsequent two years which may add as much as 60 MWp and 60 MWh of capability to the corporate’s unbiased energy producer (IPP) enterprise.

Regardless of the obvious shift in vitality coverage on the Federal degree within the US with the brand new administration taking intention at each renewable vitality supply from wind to photo voltaic, we anticipate that the demand for electrical energy producing capability that may be deliberate and constructed rapidly can be so robust that company, industrial and neighborhood photo voltaic initiatives will stay a extremely popular choice for the foreseeable future.

Whereas the general photo voltaic market is forecast to develop modestly by the stability of the last decade within the US and Canada, there are pockets of outstanding development on this market. Photo voltaic installations accounted for 64% of all new electrical energy producing capability in america within the 3^rd quarter of 2024 and the put in base of photo voltaic methods within the US is now able to powering as much as 37 million houses. Utility-scale installations, neighborhood photo voltaic, and industrial photo voltaic deployments are poised for vital development whereas residential photo voltaic continues to contract. Our full report gives a deep dive into the photo voltaic and BESS markets in North America and the drivers of development that we see by the stability of the last decade.

The Battery Vitality Storage System (BESS) market is lastly rising in North America and is projected to be the fastest-growing market within the vitality sector over the stability of the last decade. Demand for energy technology that may be quickly deployed and battery storage related to that energy is anticipated to be robust by 2030.

We’re forecasting FY2025 revenues of $52 mil USD ($73 mil CAD) and FY2026 revenues of $70 mil USD ($100 mil CAD) due largely to the Qcells and Honeywell transactions which we’ll talk about under, in addition to elevated IPP revenues and BESS initiatives accomplished over the subsequent 24 months. Our income forecast are primarily based on our evaluation and the corporate has not supplied steering.

SolarBank’s shares have been very risky over the previous three months because the prospect of a more difficult working atmosphere for renewable vitality firms emerged after the US elections in November. The corporate’s compelling story and robust regional presence have attracted new investor curiosity, however the latest financing at a under market value impacted the shares. We consider SolarBank’s shares might be value $5.00/share primarily based on our discounted money circulate evaluation, our evaluation of different built-in photo voltaic firms, and up to date transactions available in the market, nevertheless, we be aware that there stays vital headline danger related to commerce between the US and Canada and the prospect of an additional shift in US vitality coverage away from renewables.

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