Renewable Energy Co. Starts Installing Solar Project in Mexico

Revolve Renewable Power Corp. (TSXV:REVV;OTCQB:REVVF) announced installation has started on its 450-kilowatt-peak rooftop solar project at the site of a food manufacturing business in central Mexico.

The company said the project, first announced in January, is expected to generate more than 650,000 kWh of renewable electricity annually, offsetting 325,000 kilograms (325 tonnes) of carbon dioxide emissions.

Electricity will be sold to the client under a 15-year power purchase agreement (PPA) based on a fixed price per kWh generated by the project, Revolve said.

"We are delighted that installations works have now commenced on the project and look forward to the completion of these works and commissioning of the project in June," said Eric Hickert, Revolve's head of distributed generation. "We continue to see an increasing demand for distributed generation projects across our key target markets and expect to see an increasing pace of PPA signings for similar projects in the coming months."

On January 22, Technical Analyst Clive Maund predicted the stock would continue higher after a "clear breakout from a bullish Falling Wedge downtrend and a period of consolidation."

"That didn't happen, and it is now clear that the price wanted to mark out a larger base pattern, which it has now done by dipping early this month to form a Double Bottom with its lows of late last October," Maund wrote Monday.

"Since it is now still close to the second low of the Double Bottom shown on the 18-month chart below, this looks like another good point to buy or add to positions."

Commercial Operation Targeted for June

Revolve develops utility-scale wind, solar, and battery storage projects across North America. The company has a second division, Revolve Renewable Business Solutions, which installs and operates sub-20MW "behind the meter" distributed generation (or "DG") assets.

In total, the company now has more than 3 gigawatts (GW) of development projects in North America and just closed on its acquisition of WindRiver Power, an operator and developer of wind and hydro projects in British Columbia and Alberta.

"Since it is now still close to the second low of the Double Bottom shown on the 18-month chart below, this looks like another good point to buy or add to positions," Technical Analyst Clive Maund said.

Installation at the new project in Mexico is set to continue over the next few months, Revolve said, with commercial operation targeted before the end of June.

Once the project is operational, the company said it will own and operate a combined portfolio of 12.78 MW (net), selling renewable energy under long-term power purchase agreements to various utilities, cities, and industrial customers in Canada and Mexico.

Revolve said when it announced the project that it had signed an Engineering Procurement Contract (EPC) with Mexican corporation Inventive Power, an experienced installer and operator of solar photovoltaic and thermal projects in Mexico, to deliver a turnkey solution for the installation and commissioning of the project. Under this contract, Inventive will also be responsible for all scheduled and unscheduled maintenance required for the project.

The project is expected to cost about CA$540,000 to install, the company said. It will be financed through a combination of cash on hand and a CA$415,000 secured loan by RE Royalties Ltd. The financing agreements will consist of a secured loan agreement and a royalty agreement between Revolve and RER.

The Catalyst: Renewable Energy Market Heating Up

According to research by Statista, electricity generation in the renewable energy market is projected to amount to more than 7.3 billion KWh in 2024, and it is expected to grow at a compound annual growth rate (CAGR) of 3.88% between 2024 and 2028.

"The energy market is expected to continue growing, with increasing demand for energy worldwide as populations grow and economies develop," the report said. "However, the mix of energy sources is expected to shift towards cleaner and more sustainable options, with renewable energy sources like solar, wind, and hydropower projected to continue growing rapidly. Fossil fuels are expected to gradually decline in importance."

Researchers at Mordor Intelligence noted the United States' share of the renewable energy market is estimated at more than 434 GW in 2024 and is expected to reach 700 GW by 2029, growing at a CAGR of 10%.

Therefore, increasing investments in the sector are expected to drive the US renewable energy market during the forecast period.

"Factors such as increasing solar and wind energy installations over the period, supportive government policies, declining solar panel costs, and additional subsidies on renewables are expected to drive the renewable energy market during the forecast period," analysts wrote.

The U.S. government announced the framework to invest US$555 billion in clean energy programs, which is expected to be a big opportunity for companies in this space.

The company is working toward becoming "a dedicated renewable independent power producer focused on long-term recurring revenue and cash flow," Water Tower Research analysts Shawn Severson and Graham Mattison wrote in a recent research note.

Severson and Mattison wrote that closing on the WindRiver acquisition was a "key milestone in Revolve's stated strategy of utilizing both a development strategy and acquiring operating assets."

The stock still "trades at a significant discount to its peers, even though it has delivered revenue and EBITDA, has a larger development pipeline than many of its peers, and further expected payments of US$50-60 million from the (French energy major) ENGIE transaction," the two analysts noted.

REVV was ranked among the top 10 undervalued stocks in the Utilities — Independent Power Producers industry on the TSX Venture Exchange, according to the Globe and Mail in February.

Ownership and Share Structure

About 60% of the company is owned by insiders and management, Revolve said.

Top shareholders include Joseph O'Farrell with 13.21%, Roger Norwich with 12.15%, the CEO and Director Stephen Dalton with 6.01%, President and Director Omar Bojoquez with 4.82%, and Jonathan Clare with 1.84%, according to Reuters and the company.

The rest is retail.

Revolve has a market cap of CA$17.02 million with 63.04 million shares outstanding and 38.08 million free-floating. It trades in a 52-week range of CA$0.62 and CA$0.20.

Important Disclosures:

1. Revolve Renewable Power Corp. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000.
2. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Revolve Renewable Power Corp.
3. Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
4.  This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company. 

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