QualityStocks News - P2 Solar (PTOS): Betting on India’s Power Projects

QualityStocks would like to highlight P2 Solar, Inc. (OTCQB: PTOS). The company participates in the lucrative renewable energy market as a developer of solar photovoltaic (PV) power and mini-hydro projects. Acknowledging the rising demand for clean energy worldwide, renewable energy's increasingly competitive edge over grid electricity, and commercial efforts to reduce reliance on greenhouse gas emitting fossil fuels, P2 Solar invests and channels its resources to benefit from these global trends.

In the company’s news,

P2 Solar is focusing on the lucrative global renewable energy market. The company develops solar photovoltaic and mini-hydro power projects. Currently, the company is planning to enhance its project portfolio, which includes three projects — the Langley Rooftop Project in British Columbia and two others in India, the Rajgarh Mini-hydro and the Tibba Mini-hydro, both located in Punjab. The company through its wholly owned subsidiary, Jagat Energy Pvt. Ltd., acquired the rights to these two hydro-power projects in India.

Initiating the projects in India is important as electric demand in India is expected to grow by 10% annually. These projects enabled P2 Solar to deepen its footprint in India’s clean energy sector, which presents a $20 billion annual opportunity. Further, the growth rate in India’s electric demand will generate a higher long-term growth opportunity for P2 Solar.

Signing Agreement with Indian Authority to develop power plant

In May 2014, P2 Solar signed an Implementation Agreement with Punjab Energy Development Agency (PEDA), Punjab State’s governing authority on all renewable energy projects, and the Punjab Irrigation Department (PID). In this agreement, the company will establish, operate, and maintain the Rajgarh Mini-Hydro project on a build, own, and operate basis. The cost of constructing this plant is estimated at around $2.2 million. Along with this P2 Solar received permission to use the canal water for power generation for the next 35 years, and after that with mutual consent of PEDA and P2 Solar the agreement will either be extended or PEDA will purchase the project outright at market price.

The company is planning to hire an engineering, procurement, and construction (EPC) contractor and expected to commence construction in the second quarter of this year.

Earlier P2 Solar also received the rights to use the canal open space to develop the PV Solar plant, which will generate a significant long-term growth expansion opportunity. This one-megawatt (MW) PV solar project is in the first phase, and the company expects to expand it to seven to ten MW. P2 Solar will be deploying the necessary equipment and is expected to commission the solar project in India during the fourth quarter of this year, while its hydro projects will require a longer build time of around 10 months and will be operational by 2015.

By developing the Rajgarh power plant in India, P2 Solar will have a greater future revenue growth opportunity. The government of India is planning to enhance solar capacity to five gigawatts by 2017 and 20 gigawatts by 2022. Solar power by 2022 will represent 10% of India’s total electric power-generating capacity. The completion of the Rajgarh mini-hydro plant could help the company to enhance its top line by more than $443,000 per year, while expanding the PV solar project to the proposed 10-MW solar array will provide additional annual revenue growth opportunity of around $2.95 million. Though developing the power projects requires huge capital, the power projects can be operated with low operating costs. Because of this, the company expects to generate significant cash flows with EBITDA margins of around 95% and 93% for mini-hydro and solar, respectively.

Developing power projects in other locations

In addition to India, P2 Solar is proactively focusing on energy project development opportunities in countries with favorable solar energy regimes, including Canada and Eastern Europe. Last year, the company completed the installation of its 53-kilowatt (KW) solar PV rooftop project on Canada Ticket Inc.’s warehouse rooftop in Langley. This is the largest solar PV facility ever to be connected to the British Columbia Hydro’s electricity grid. To develop this project the company charged around $158,900 and is expected to generate around 60-MW hours of electrical power annually, which is nearly 10% of Canada Ticket electric power requirements. Furthermore, the Canada Ticket project will generate awareness and interest among potential new clients in British Columbia. This will enable the company to gain more contracts and support its revenue in the long run.

Conclusion

The higher demand and the growth rate in India’s electric demand as well as P2 Solar initiation of hydro and PV solar projects in India are expected to generate a greater long-term revenue growth opportunity. Moreover, the contract with Canada Ticket to develop the power plant will also generate growth in Canada. The success of the Rajgarh projects will significantly boost the company’s top and bottom lines, enabling investors to realize higher capital appreciation long-term.

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Forward-Looking Statement:

This release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All forward-looking statements are inherently uncertain as they are based on current expectations and assumptions concerning future events or future performance of the company. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. Risks and uncertainties applicable to the company and its business could cause the company's actual results to differ materially from those indicated in any forward-looking statements.