Canadian Solar Inc. announced financial results for the quarter ended June 30, 2021.


  • Solar module shipments of 3.7 GW in the second quarter of 2021, top end of 3.5 GW to 3.7 GW guidance.
  • Revenue increased 105% year-over-year (“yoy”) to a record $1.43 billion, in line with guidance of $1.4 billion to $1.5 billion.
  • Gross margin of 12.9%, ahead of guidance range of 9.5% to 10.5%.
  • Net income attributable to Canadian Solar of $11 million, or $0.18 per diluted share.
  • 1.5 GWh of battery storage projects under construction and 19 GWh of total storage development pipeline.
  • Published the ESG Sustainability Report with updated disclosures aligned with global standards on July 29, 2021.
  • Carve-out IPO of CSI Solar subsidiary remains on track.

Dr. Shawn Qu, Chairman and CEO, commented, “I am pleased that we have turned the corner in the second quarter, delivering strong revenue growth and better-than-expected profitability. While market conditions remain challenging, we continue to focus on initiatives to strengthen our long-term positioning such as growing our pipeline of valuable solar and battery storage projects, and differentiating our technology and product offering through value-add system solutions. Notably, we have made significant progress in growing, executing and monetizing our battery storage projects and will update the market in due course.

“At the same time, we are also fully incorporating environmental, social and governance factors in all our major business decisions, and recently published our latest ESG Sustainability Report. As an example, we are establishing our first manufacturing facility of 10 GW ingot capacity in Qinghai Province, which will help us meaningfully reduce the carbon footprint of our products as nearly 90% of Qinghai’s installed power capacity is clean energy.

“Separately, the carve-out IPO of CSI Solar remains on track, with the listing application materials having been submitted.  We are now addressing comments from the Shanghai Stock Exchange in accordance with usual review procedures.”

Yan Zhuang, President of Canadian Solar’s CSI Solar subsidiary, said, “Although polysilicon and transportation costs remained elevated, we continue to raise module pricing, prioritize margins while maximizing capacity utilization, and continue to improve on our product and manufacturing efficiency as we take further cost control measures. During the second quarter, we also delivered our first batch of large-scale battery storage shipments. While we anticipate and respond to short-term market fluctuations, our long-term growth strategy remains unchanged. That is, to grow market share through capacity expansion, improve pricing power through technology differentiation and optimized channel structure, and gain more control over our supply chain through upstream positioning.”

Ismael Guerrero, Corporate VP and President of Canadian Solar’s Global Energy subsidiary, said, “We have seen a meaningful increase in demand for our solar and battery storage projects driven by both existing and new low cost of capital market players. This demonstrates that the capital pool for clean energy infrastructure assets is both broadening and deepening, yet the supply of these assets remains scarce. We are positioned to benefit from these trends with a global solar project pipeline of 22 GW of which nearly 6 GW is contracted and/or under construction. We also have a global battery storage project pipeline of 19 GWh of which 2.3 GWh is contracted and/or under construction. Recently, we started signing higher priced PPAs (power purchase agreements), which are helping to offset the impact of higher equipment costs. Meanwhile, we continue to execute on our strategy to grow our base of recurring income through expanding our market share in services such as operations and maintenance and long-term ownership of project investment vehicles.”

Dr. Huifeng Chang, Senior VP and CFO, added, “We posted our highest quarterly revenue of $1.43 billion in the second quarter and made significant progress to capitalize on growth in the battery storage market. We ended the second quarter with $1.3 billion in cash, and have raised approximately $110 million to date from our at-the-market equity offering program, which is well on track. We also took the opportunity to lengthen the overall maturity profile of our debt during the quarter to further improve our financial position.”

Second Quarter 2021 Results

Total module shipments in the second quarter of 2021 were 3.66 GW, a 26% yoy increase and 17% quarter-over-quarter (“qoq”) increase. Of the total, 167 MW was shipped to the Company’s own utility-scale solar power projects.

Net revenue in the second quarter of 2021 grew by 105% yoy and 31% qoq to $1,430 million. The sequential improvement was driven by an increase in module shipments and average selling price (“ASP”), growth in beyond-module sales and a higher revenue contribution from battery storage shipments, partially offset by lower project sales.

Gross profit in the second quarter of 2021 was $185 million, down 5% qoq but up 26% yoy. Gross margin in the second quarter of 2021 was 12.9%, above guidance of 9.5% to 10.5% driven by higher module ASP, manufacturing efficiency improvements and a greater contribution from battery storage shipments and beyond-module sales. Sequentially, the second quarter gross margin was below first quarter 2021 gross margin of 17.9% mainly driven by lower project sales margin due to a geographic mix shift.

Total operating expenses in the second quarter of 2021 were $158 million compared to $151 million in the first quarter of 2021. The sequential increase was mainly driven by higher shipping and handling expenses and a decrease in other operating income, partially offset by a customer claim reversal.

Non-cash depreciation and amortization charges in the second quarter of 2021 were $66 million, compared to $62 million in the first quarter of 2021, and $48 million in the second quarter of 2020. The sequential increase was driven by CSI Solar’s capacity expansion as reflected in higher property, plant and equipment.

Net foreign exchange loss in the second quarter of 2021 was $3 million, compared to a net loss of $7 million in the first quarter of 2021 and a net loss of $5 million in the second quarter of 2020.

Income tax benefit in the second quarter of 2021 was $2 million, compared to $14 million of income tax expense in the first quarter of 2021 and $9 million of income tax expense in the second quarter of 2020. The benefit reflected lower effective tax rate and lower impact from high tax jurisdictions.

Net income attributable to Canadian Solar in the second quarter of 2021 was $11 million, or $0.18 per diluted share, compared to net income of $23 million, or $0.36 per diluted share in the first quarter of 2021. The decline in net income was driven by lower gross profit and higher operating expenses, partially offset by the income tax benefit.

Net cash used by operating activities in the second quarter of 2021 was $61 million, compared to $83 million in the first quarter of 2021. The operating cash outflow was mainly driven by an increase in accounts receivable and a continued increase in inventory, as a result of capacity expansion as well as a tactical hedge against input cost and ASP inflation. This was partially offset by higher accounts and notes payables.

Total debt in the second quarter of 2021 was $2.23 billion, compared to $2.28 billion in the first quarter of 2021. The decrease in total debt was mainly driven by a reduction of project financing upon project sales, partially offset by new borrowing and existing facility drawdowns. Non-recourse debt used to finance solar power projects decreased to $454 million in the second quarter of 2021 from $522 million in the first quarter of 2021 as a result of project sales.

Battery Storage Opportunities

Canadian Solar is strategically positioned in the battery storage market, both in solar plus battery storage, as well as in stand-alone storage opportunities. The rapid growth of the energy storage market is driven by technology improvements, declining battery storage costs, rising penetration of renewable energy and accelerating retirements of fossil fuel capacity.

Canadian Solar has a strong brand recognition and global network given its leadership in both module manufacturing and solar project development. Both CSI Solar and Global Energy have focused strategically on their respective energy storage businesses:

  • Under Global Energy, energy storage project development is now fully integrated within the main solar development teams. Given the segment’s large and growing pipeline, it is positioned to capture utility-scale energy storage projects.
  • Under CSI Solar, the battery storage solutions team focuses on delivering bankable, end-to-end, integrated battery storage solutions for utility scale, commercial and industrial, as well as residential applications. These systems solutions will be complemented with long term service agreements, including future battery capacity augmentation services.

While there are synergies between the Global Energy and CSI Solar teams, both operate independently and on different sections of the battery storage value chain. The project pipeline for each team should be assessed independently. Please refer to the Global Energy and CSI Solar sections of this document for specific pipeline figures.

Global Energy Segment

Canadian Solar has one of the world’s largest and most geographically diversified utility-scale solar and energy storage project development platforms, with a strong track record of originating, developing, financing and building over 6.1 GWp of solar power plants across six continents. The Company has built a leadership position in solar project development with over 22 GWp total pipeline, as well as in energy storage project development with over 19 GWh of aggregate pipeline.

The continued pipeline expansion and strong project development track record will support Global Energy’s growth in three key areas:

  1. Project sales: The Company plans to grow its volume of project sales by a compound annual growth rate of 25% over the next five years, well ahead of global market growth rate of approximately 20% according to many research reports.
  2. Investment vehicles: The Company is optimizing its project monetization strategy by establishing local investment vehicles that will help maximize the value of its project assets. The Company also intends to retain minority ownership in these vehicles. By 2025, the Company plans to reach at least 1 GW of combined net ownership in solar power projects through these vehicles. This approach will help the Company build and grow a stable base of long-term cash flows from contracted electricity. The Company will be able to recycle a large portion of the capital into developing new solar projects for growth. Meanwhile, Canadian Solar expects to capture additional operational value throughout the partial ownership period, including long-term cash flows from power sales, operations and maintenance (O&M), asset management and other services (see point 3). The Company currently owns a 15% stake in the Canadian Solar Infrastructure Fund (“CSIF”, TSE: 9284), the largest listed Japanese infrastructure fund on the Tokyo Stock Exchange. The Company also established the Brazilian Participation Fund for Infrastructure projects (FIP-IE). Similar project investment vehicles in certain European countries are also currently underway. Through launching these localized vehicles, Canadian Solar is building up its expertise in designing investment vehicles in local markets that will help maximize the value of its project assets.
  3. Services: Canadian Solar currently manages over 2 GW of operational projects under long-term O&M agreements, and an additional 2 GW of contracted projects that will be operated and maintained by the Company once they are placed in operation. The Company’s target is to reach 11 GW of projects under O&M agreements by 2025.

Management targets to achieve the following over the next 5 years:

Global Energy Targets20212022202320242025
Annual Project Sales, GWp1.8-2.32.4-2.93.2-3.73.6-4.14.0-4.5
Operational O&M Projects, GWp2.
Net Cumulative Projects Retained, MWp2004007609601,000
Gross Cumulative Projects Retained, MWp6501,3002,6503,1503,400

Solar Project Pipeline

As of June 30, 2021, the Company’s total project pipeline was 22.2 GWp, including 1.7 GWp under construction, 4.1 GWp of backlog, and 16.4 GWp of earlier stage pipeline. The backlog includes projects that have passed their Risk Cliff Date and are expected to be built in the next one to four years. A project’s Risk Cliff Date depends on the country where the project is located and is defined as the date on which the project passes the last high-risk development stage. This is usually after the projects have received all the required environmental and regulatory approvals, interconnection agreements, feed-in tariff (“FIT”) arrangements and power purchase agreements (“PPAs”). Over 90% of projects in backlog are contracted (i.e., have secured a PPA or FIT), and the remaining are reasonably assured of securing PPAs.

The Company’s pipeline includes early- to mid-stage project opportunities currently under development but that are yet to be de-risked.

The following table presents the Company’s total project pipeline.

Total Project Pipeline (as of June 30, 2021) – MWp
RegionIn ConstructionBacklogPipelineTotal
North America1157444,9005,759
Latin America981*2,1004,3107,391
Europe, the Middle East and Africa (“EMEA”)455*3,6324,087
Asia Pacific excluding Japan and China3471911,5472,085
China (part of CSI Solar)804031,9202,403
*Note: Gross MWp size of projects includes 573 MWp in construction in Latin America,and 110 MWp in backlog in EMEA, that are not owned by Canadian Solar or have been sold to third parties.

The Company has 381 MWp of premium, high FIT projects in Japan. The table below sets forth the expected COD schedule of the Company’s project backlog in development and construction in Japan, as of June 30, 2021:

Expected COD Schedule – MWp 

202120222023 and

Battery Storage Project Pipeline

The Global Energy segment has been actively developing utility-scale solar plus energy storage projects, as well as stand-alone battery storage projects. The Company found that virtually all its solar power projects under development can co-host energy storage facilities and has done so since the first quarter of 2021. By co-hosting energy storage facilities with solar power plants on the same piece of land and using the same interconnection point, the Company expects to significantly enhance the value of its assets under development.

Canadian Solar has already signed several storage tolling agreements with a variety of power purchasers, including community choice aggregators, investor-owned utilities, universities, and public utility districts. The Company has also signed development services agreements to retrofit operational solar projects with battery storage, many of which were previously developed by the Company.

The table below sets forth Global Energy’s storage project development backlog and pipeline.

Storage Project Development Backlog and Pipeline(as of June 30, 2021) – MWh
RegionIn ConstructionBacklogPipelineTotal
North America1,5018009,28511,586
Latin America4,5054,505
Europe, the Middle East and Africa (“EMEA”)1,2421,242
Asia Pacific excluding Japan 1,9101,910

Solar Power Plants and Battery Storage Projects in Operation

As of June 30, 2021, the Company’s solar power plants in operation totaled 391 MWp, with a combined estimated net resale value of approximately $390 million to Canadian Solar. The estimated resale value is based on selling prices that Canadian Solar is currently negotiating or transaction prices of similar assets in the relevant markets.

Solar Power Plants in Operation – MWp
Latin AmericaJapanAsia Pacific ex. Japan and ChinaChinaTotal
Note: Gross MWp size of projects, includes 26 MWp in Asia Pacific ex. Japan and China already sold to
third parties. China portfolio is part of CSI Solar.

Operating Results

The following table presents unaudited select results of operations data of the Company’s Global Energy segment.

Global Energy Segment Financial Results(In Thousands of U.S. Dollars, Except Percentages and Unless Otherwise Stated)
Three Months EndedSix Months Ended
June 30,2021March 31,2021June 30,
June 30,2021June 30,2020*
Net revenues280,614471,06232,433751,676274,983
Cost of revenues268,855358,03729,080626,892183,014
Gross profit11,759113,0253,353124,78491,969
Operating expenses15,63227,94417,99143,57645,777
Income (loss) from operations(3,873)85,081(14,638)81,20846,192
Gross margin4.2%24.0%10.3%16.6%33.4%
Operating margin-1.4%18.1%-45.1%10.8%16.8%
*Historical amounts for the three months and six months ended June 30, 2020 have been revised to conform to current period presentation

CSI Solar Segment

CSI Solar’s 2021 and 2022 capacity expansion targets are detailed below.  

Manufacturing Capacity, GW (as of period end)

FY20 Actual1H21 ActualFY21 Plan

Note: CSI Solar’s capacity expansion plans are subject to change without notice based on market conditions and capital allocation plans.

Operating Results 

The following table presents unaudited select results of operations data of the CSI Solar segment for the periods indicated.

CSI Solar Segment Financial Results*(In Thousands of U.S. Dollars, Except Percentages and Unless Otherwise Stated)
Three Months EndedSix Months Ended
June 30,
March 31,
June 30,
June 30,
June 30,2020**
Net revenues1,183,958695,152709,1801,879,1101,398,927
Cost of revenues1,028,470627,694551,8121,656,1641,079,390
Gross profit155,48867,458157,368222,946319,537
Operating expenses140,516120,12679,484260,642157,472
Income (loss) from operations14,972(52,668)77,884(37,696)162,065
Gross margin13.1%9.7%22.2%11.9%22.8%
Operating margin1.3%-7.6%11.0%-2.0%11.6%
Includes effects of both sales to third party customers and to the Company’s Global Energy Segment. Please refer to the
attached financial tables for intercompany transaction elimination information. Income from operations reflects
management’s allocation and estimate as some services are shared by the Company’s two business segments
** Historical amounts for the three months and six months ended June 30, 2020 have been revised to conform to current
period presentation

The table below provides the geographic distribution of the net revenue of CSI Solar:

CSI Solar Net Revenues Geographic Distribution* (In Millions of U.S. Dollars, Except Percentages)
Q2 2021% of Net
Q1 2021% of Net
Q2 2020% of Net
Europe and others201171171918728

*Excludes sales from CSI Solar to Global Energy.

CSI Solar shipped 3.7 GW of modules to nearly 80 countries in the second quarter of 2021. The top five markets ranked by shipments were China, the U.S., Brazil, Germany and Japan.

Battery Storage Solutions

Within CSI Solar, the battery storage solutions team delivers competitive turnkey, integrated battery storage solutions, including bankable and fully wrapped capacity and performance guarantees. These guarantees are complemented with long term operations and maintenance agreements, which include future battery capacity augmentation services and bring in longer term, stable income.

The table below sets forth CSI Solar’s battery storage system integration’s contracted projects and/or under construction, those in high probability forecast, and pipeline, as of June 30, 2021.

Contracted/In ConstructionForecastPipelineTotal
Storage (MWh)8611,4004,3516,612

Contracted/in construction projects are expected to be delivered within the next 12 to 18 months. Forecast projects include those that have more than 75% probability of being contracted within the next 12 months, and the remaining pipeline includes projects that have been identified but have a below 75% probability of being contracted.

Business Outlook

The Company’s business outlook is based on management’s current views and estimates given factors such as existing market conditions, order book, production capacity, input material prices, foreign exchange fluctuations, anticipated timing of project sales, and the global economic environment. This outlook is subject to uncertainty with respect to, among other things, customer demand, project construction and sale schedules, product sales prices and costs, and the global impact of the ongoing COVID-19 pandemic. Management’s views and estimates are subject to change without notice.

For the third quarter of 2021, the Company expects total module shipments to be in the range of 3.8 GW to 4.0 GW, including approximately 275 MW of module shipments to the Company’s own projects. Total revenues are expected to be in the range of $1.2 billion to $1.4 billion. Gross margin is expected to be between 14% and 16%.

The Company reiterates its expectation that full year 2021 revenue will be in the range of $5.6 billion to $6.0 billion, while slightly reducing its full year 2021 total module shipment guidance to 16 GW to 17 GW from 18 GW to 20 GW previously. The Company reiterates its project sales guidance of 1.8 GW to 2.3 GW and total battery storage shipment guidance of 810 MWh to 860 MWh for the full year 2021.

Dr. Shawn Qu, Chairman and CEO, commented, “While we continue to navigate volatile market conditions, we expect Canadian Solar’s performance to improve through the remainder of 2021 both in shipment volume, profitability and project sale execution. The wider-than-usual revenue and profitability range for the third quarter reflects the timing of certain project sales which may be recognized towards the end of the quarter or early in the following one. Additionally, we expect higher module ASPs to offset the lowered full year module shipments and therefore full year revenue guidance is unchanged. Canadian Solar continues to expect market share gains in 2021 as the trimmed shipment guidance is reflective of marginally softer global demand expectations as a response to higher equipment costs.

“Structurally, demand for solar energy and battery storage continues to grow strongly. Canadian Solar is well positioned to capture long-term growth through continued investments in high quality capacity, project pipeline and technology R&D, and continues to focus on delivering long-term sustainable returns for shareholders.”

Recent Developments

On August 10, 2021, Canadian Solar announced its wholly owned subsidiary Recurrent Energy signed a 15-year Resource Adequacy agreement with Pacific Gas & Electric to provide 150 MW / 600 MWh of energy storage in phase 2 of the Crimson project. The full Crimson project of 350 MW / 1,400 MWh will be one of the largest battery energy storage projects in the world when it comes online beginning in summer 2022.

On July 29, 2021, Canadian Solar published its 2020 Sustainability Report, which provides an extensive analysis of the Company’s environmental, social and governance performance, and establishment of organizational structures and target metrics to incorporate ESG into every major business decision.

On July 27, 2021, Canadian Solar announced it closed a BRL500 million (approximately US$100 million) financing facility with Brazilian banks BTG Pactual and Itaú BBA to support the development and construction of its solar projects in Brazil. The facility will fund up to 70% of Canadian Solar’s equity contribution in a subset of its Brazilian project portfolio, a unique structure in the local market.

On July 21, 2021, Canadian Solar announced its wholly owned subsidiary Recurrent Energy completed the sale of the Maplewood 1 and Maplewood 2 solar projects in Texas to a leading U.S. annuity and life insurance company. The two projects, with a combined capacity of 328 MWp, are currently under construction and are expected to reach commercial operation before the end of Q3 2021.

On July 14, 2021, Canadian Solar announced it signed a 10-year power purchase agreement with Centrica Energy Trading A/S for two solar power projects totaling 12 MWp in Italy.

On July 12, 2021, Canadian Solar announced it was awarded the first utility-scale battery storage project in Colombia of 45 MW / 45 MWh. The project will consist of a 45 MWh lithium-ion battery energy storage system and is expected to reach commercial operation by June 2023. The project is granted with a 15-year revenue structure with the Colombian government and is indexed to the country’s inflation or producer price index.

On June 29, 2021, Canadian Solar announced it was awarded 86 MWp in Japan’s 8th solar energy auction, accounting for the largest share of the total capacity auctioned. The projects are expected to reach commercial operation between the years of 2024 and 2026. Once constructed, these projects will enter into a 20-year power purchase agreement with Tohoku Power Electric Company at a weighted average rate of ¥10.77 ($0.098) per kWh.

On June 28, 2021, Canadian Solar announced its majority-owned subsidiary CSI Solar Co., Ltd. (“CSI Solar”) submitted the application documents for its potential initial public offering (“IPO”) and listing on the Science and Technology Innovation Board (the “STAR” Market) of the Shanghai Stock Exchange. The documents have been received by the Shanghai Stock Exchange.

On June 24, 2021, Canadian Solar announced it secured EUR50 million bilateral corporate facility with Banco Santander, S.A. (“Santander”) to support growth of its project development pipeline in the EMEA region, further diversifying the Company’s sources of financing.

On June 22, 2021, Canadian Solar announced its wholly owned subsidiary Recurrent Energy expanded its energy storage footprint in the U.S., with several leading Battery Energy Storage Systems (“BESS”) contracted totaling 2.3 GWh to be built in 2021 and 2022. These projects span retrofits as-a-service, solar plus storage PPAs, and stand-alone storage tolling agreements.

On May 24, 2021, Canadian Solar announced it signed a 10-year power purchase agreement with Axpo Italia for the purchase of energy produced by two solar power plants totaling 12 MWp under development by Canadian Solar in Italy.

Source: Canadian Solar 



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