NEW YORK - Shares of Canadian Solar Inc. rose Tuesday, as the solar cell maker signed a contract that may have inspired investor optimism about the company's chances for success in the U.S.
Before trading began, the company said it agreed to sell solar modules to a Massachusetts company, American Capital Energy. Financial terms were not disclosed, and the modules will be used to make a fairly small system. Under the project, a commercial roof space will be converted into a private power generation site featuring a 300 Kilowatt grid-connected solar power system.
While the deal is not large, Deutsche Bank analyst Stephen O'Rourke said the contract is significant because investors have such high expectations for the U.S. solar market.
"It's all about positioning for the market," he said in a telephone interview. "It's not a huge system, but it is a footprint in the U.S."
Shares added 60 cents, or 6.3 percent, to $10.14. Trading was more than four times heavier than normal.
Solar stocks have been strong in recent months, but Canadian Solar has missed out on those gains: Shares have lost more than a third of their value since they began trading in November.
O'Rourke said Tuesday's deal could be a step toward proving the company is on the right track, overcoming its problems with weak margins.
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