Canadian Solar Inc. is a solar technology and renewable energy company.
The company is a manufacturer of solar photovoltaic modules, provider of solar energy and battery energy storage solutions, and developer of utility-scale solar power and battery energy storage projects. The company’s geographic footprint is diversified, as its sales, as well as development pipeline in various stages of development are located across North America, South America, Europe, Africa, the Middle East, Australia a...
Canadian Solar Inc. is a solar technology and renewable energy company.
The company is a manufacturer of solar photovoltaic modules, provider of solar energy and battery energy storage solutions, and developer of utility-scale solar power and battery energy storage projects. The company’s geographic footprint is diversified, as its sales, as well as development pipeline in various stages of development are located across North America, South America, Europe, Africa, the Middle East, Australia and Asia.
The company’s business operations are divided into two business segments, namely CSI Solar and Recurrent Energy.
CSI Solar Segment
Under CSI Solar, the company designs, develops and manufactures solar ingots, wafers, cells, modules and other solar power and battery energy storage products. The company conducts its manufacturing operations in China, Southeast Asia and the U.S. The company’s products are used for residential, commercial and industrial solar power generation systems. The company sells its solar module products primarily under the company’s ‘Canadian Solar’ brand name.
The company offers one of the broadest crystalline silicon solar power product lines in the industry. The company’s product lines range from modules of medium power output to high efficiency, high-power output mono-crystalline modules, as well as a range of specialty products. The company sells its solar power and battery energy storage products to a diverse customer base in various markets worldwide, including the U.S., Canada, Germany, Spain, the Netherlands, South Africa, China, Japan, India, Thailand, Australia, Brazil and the U.K. The company’s customers are primarily distributors, system integrators, project developers and installers/EPC companies.
The company employs a flexible vertically integrated business model that combines internal manufacturing capacity with direct material purchases of ingots, wafers and cells.
As of December 31, 2023, the company had 57.5 GW of module total annual manufacturing capacity, approximately 10.9 GW of which is located in Southeast Asia, 2.0 GW of which is located in the U.S., and the rest in China; 50.0 GW of cell total annual manufacturing capacity, approximately 12.2 GW of which is located in Southeast Asia and the rest in China; 21.0 GW of wafer total annual manufacturing capacity located in China; and 20.4 GW of ingot total annual manufacturing capacity located in China.
The company targets to expand its solar module, solar cell, wafer and ingot total annual manufacturing capacities to 61.0 GW, 55.7 GW, 50.0 GW and 50.4 GW, respectively, by December 31, 2024.
‘e-STORAGE’ is CSI Solar’s utility-scale battery energy storage platform. e-STORAGE provides customers with competitive turnkey, integrated, utility-scale battery energy storage solutions, including bankable, end-to-end, utility-scale, turnkey battery energy storage system solutions across various applications. System performance is complemented with long-term service agreements, which include future battery capacity augmentation services and bring in long-term, stable income.
In 2022, the company launched the SolBank, a lithium iron phosphate (‘LiFePO4’) chemistry-based battery energy storage enclosure specifically engineered for utility-scale applications. In 2023, SolBank achieved over 5 MWh of usable energy capacity. SolBank is designed with liquid cooling and humidity control, active balancing BMS (‘Battery Management System’) technologies, and complies with the latest international safety and compliance standards. The company produces SolBank on fully automated, state-of-the-art production and testing facilities.
In 2022, the company launched its residential battery energy storage product, the ‘EP Cube’, in the U.S. market and had since also launched the product in Europe and Japan.
Recurrent Energy Segment
The company’s Recurrent Energy segment primarily comprises solar and battery energy storage project development and sale, power services (O&M) and asset management services for operational projects and sale of electricity from the company’s operating portfolio. The company’s expertise spans from sourcing land, interconnection agreements, structuring PPAs, and obtaining permits and other requirements. In April 2023, the company announced the rebranding of its Global Energy subsidiaries as Recurrent Energy. Recurrent Energy, previously the company’s North American utility-scale solar and battery energy storage project developer, since then encompassed all the company’s global development and services businesses.
While Recurrent Energy’s business model was historically predominantly develop-to-sell, the company has been adjusting its strategy to create greater asset value and retain greater ownership of projects in select markets to increase revenues generated through recurring income, such as power sales, O&M and asset management income.
Products and Services
Products Offered in the company’s CSI Solar Segment
Standard Solar Modules
The company’s standard solar modules are arrays of interconnected solar cells in weatherproof encapsulation. The company produces a wide variety of standard solar modules, ranging from 400W to over 700W in power and using mono-crystalline cells in several different design patterns. The company introduced the industry’s first module product using 166 mm wafers, in comparison with the conventional 156.75 mm wafers. The company also first introduced the highest power 665W module using 210 mm wafers in mass production. The company’s mainstream solar modules include CS7N (132 half-cells, 210 mm wafer, mono facial and bifacial), CS7L (120 half-cells, 210 mm wafer, mono facial and bifacial), CS6W (144 half-cells, 182 mm wafer, mono facial and bifacial), CS6L (120 half-cells, 182 mm wafer, mono facial) and CS6R (108 half-cells, 182 mm wafer, mono facial). The company’s mainstream modules are designed for residential, commercial and utility applications, while the company’s small modules are for specialty applications.
In 2021, the company expanded its manufacturing capacity for the HiKu6 (182 mm wafers) and HiKu7 (210 mm wafers) series modules. The company invested in a research and production pilot line for Heterojunction (‘HJT’) solar cells and modules, which uses in-house developed N-type mono-silicon ingots and wafers. Based on the company’s high efficiency HJT cells, the company introduced 6R-H-AG (108 half-cells, 182 mm wafer) with module power up to 440W to cater to the residential market. To satisfy residential customers who frequently experience strong wind loads, the company introduced a mechanically enhanced version of CS3N (132 half-cells, 166 mm wafer) in 2021. Also, as modules with larger wafers (182 mm and 210 mm) gained market share, the company developed CS6R (108 half-cells, PERC technology, 182 mm wafers) for the global residential market in 2021. CS6R has module power up to 420W and was introduced in 2022.
Furthermore, the company embarked on the development of N-type wafer-based modules with TOPCon technology. The company’s in-house TOPCon manufacturing capability is integrated from N-type ingot growth, wafering, cells to modules. The company started to deliver its 182 mm and 210 mm cell based TOPCon modules in 2023. In March 2022, the company successfully established a pilot line for TOPCon cells and produced the first piece of TOPCon cell with an average cell efficiency of up to 24% and a yield over 98% by September 2022. With mass production, cell efficiency reached 25%, which is 1.3% higher than the average efficiency of PERC cells in the market. The company named its new module products, TOP(Bi)HiKu6 and TOP(Bi)HiKu7, which includes the 182 mm cell based bifacial TOPBiHiKu6 (565W-585W) and monofacial TOPHiKu6 (440W-590W) modules, and the 210 mm cell based bifacial TOPBiHiKu7 (630W-705W) modules. All certifications and reliability tests were completed in December 2022.
The company’s TOPCon modules have solidified its product and technology leadership and further increased customers’ return on investment. Firstly, temperature coefficient of the company’s TOPCon modules is low, making them perform better under hot environments compared to mainstream module products. Secondly, they do not suffer from boron-oxygen related LID (‘Light Induced Degradation’), resulting in less power degradation. Thirdly, the power degradation of the TOPCon modules is lower compared to degradation of PERC modules under similar tests. Furthermore, the bifaciality of TOPCon bifacial modules can reach up to 85%, with a power gain of approximately 2% compared to PERC bifacial modules under similar field conditions.
In 2022, motivated by the lower carbon footprint compared to aluminum frame modules, the company developed a steel frame module based on (monofacial and bifacial) CS6W and CS7N for utility-scale markets. The company has an inhouse-designed steel frame with special cross-section structure to improve cost-performance ratio.
Driven by carbon neutrality goals, the commercial and industrial roof market has rapidly developed. In this market, customers need not only a photovoltaic module but also an integrated system solution. In June 2022, the company initiated the development of BIPV (‘Building Integrated Photovoltaic’) products and have completed the design of all components of the whole system, including a customized tin roof, PV module, and special designed clamp that have advantages in both better appearance and higher reliability. The company launched its BIPV products in 2023.
In 2023, the company developed and launched the new TOP(Bi)HiKu6 series of products based on 182 mm rectangular wafer size (‘182R’). Compared with the original TOP(Bi)HiKu6 series modules, the power of the new series module has increased by approximately 5% from the prior series. With the new series module, the loading capability per container increased by approximately 8%, resulting in savings of transportation and logistics costs across the supply chain. Furthermore, from system LCOE cost point of view, the 182R TOPCon provides cost advantages compared to the 182 mm PERC and 182 mm TOPCon. There are 4 versions of new 182R series for different scenarios, with power up to 515W and efficiency up to 22.8% for residential and small commercial and industrial (‘C&I’) projects, and with power up to 620W and efficiency up to 23% for large scale C&I projects, as well as utility projects.
The company’s standard solar modules are designed to endure harsh weather conditions and to be transported and installed easily.
Battery Energy Storage Solutions
The company’s utility-scale battery energy storage offering includes proprietary products, technology and integrated solutions focused on delivering high performance, safe and reliable battery energy storage solutions enabling utilities, independent power producers, and energy investors and users to achieve energy savings, while maintaining power reliability and resilience. The company’s battery energy storage solutions are utilized across various market sectors, including high voltage grid scale, commercial and industrial business, and residential homes. Battery energy storage helps to provide the balance of energy delivery with energy consumed, including absorption of excess energy in the systems and release for when it is needed.
Battery energy storage demand is growing for various utility grid opportunities and applications including energy arbitrage, reserve capacity, flexible peaking and resource adequacy, as well as grid frequency regulation and voltage control. The company has successfully introduced its high-energy and high-power storage power block with integrated lithium-ion phosphate batteries designed to meet market demand for 1 to 4 hours of battery energy storage duration. The company’s turn-key offering includes the integrated battery, power conversion systems and the energy management system. The company also offers comprehensive services and capabilities with these project installations, including consulting and project engineering, procurement, and construction (‘EPC’) management.
Furthermore, the company supports its installed projects using its capabilities to offer contracted long term services contract commitments that include operation and maintenance, capacity augmentation, system performance level, warranty, and other services throughout the operational phase of the projects.
To leverage the company’s significant growth and advancement into the global battery energy storage market, the company is investing significantly into developing the company’s own battery energy storage proprietary products, technologies, and manufacturing. For example, in 2021, the company started designing and developing proprietary DC battery energy storage systems, including battery modules and packs, under the ‘SolBank’ product brand name. During 2022, the company launched the SolBank, a LiFePO4 chemistry-based battery energy storage enclosure specifically engineered for utility-scale applications, with up to 2.967 MWh of nameplate energy capacity for SolBank 1.0.
In December 2023, the company launched the SolBank 3.0 products, with power up to 2.35 MW and capacity of 5 MWh. SolBank 3.0 seamlessly integrates high energy density cells, an advanced safety system, smart liquid cooling, and active balance system controls. Housed in a 20-ft container, SolBank 3.0 provides up to 45% increase in product-level capacity and up to 40% decrease in commissioning time, compared to its previous generation. SolBank 3.0 is equipped with a pack and electrical redundancy protection system, smart abnormal performance detection, multi-level fire alarm, and suppression protection, ensuring product safety. Additionally, the optimized thermal management system reduces auxiliary power consumption by up to 30% compared to the previous generation. SolBank 3.0’s flexible and modular design is compatible with different power conversion systems (PCS).
The company’s battery energy storage total annual manufacturing capacity for SolBank was 10.0 GWh in December 2023, and the company plans to expand the total annual capacity to 20.0 GWh by December 2024.
In 2022, the company launched its residential battery energy storage product, EP Cube, in the U.S. market and have since also launched the product in Europe and Japan. EP Cube is the company’s residential all-in-one battery energy storage solutions that allow users to increase the efficiency of their self-consumption solar PV installations by storing, managing and using the electricity generated with their own PV system, with capacities ranging from 9.9 kWh to 19.9 kWh per EP Cube unit, up to 119.9 kWh for full system.
Solar System Kits
A solar system kit is a ready-to-install package consisting of solar modules produced by the company and components, such as inverters, racking system and other accessories, supplied by third parties. The company began selling solar system kits in 2010. In 2023, the company sold them primarily to customers in China, Japan and Brazil.
Power Electronic Products
The company’s power electronic products include residential 5 kW and 7-9 kW inverters, C&I 15-25 kW, 40-60 kW and C&I 75-125 kW inverters, and the 320/350kW inverter series for utility-scale application. The company provides inverters that match its module characteristics. The company’s large current matching capabilities, intelligent MPPT algorithm, temperature derating performance, and unique patented air duct and structure designs make the company’s product one of the most competitive players among inverter manufacturers. In 2023, the company sold its power electronic products primarily to customers in Brazil and China. The company expects to introduce energy storage power converter products to the market in 2024.
EPC Services
The company provides EPC services in China to ground-mounted solar power and battery energy storage projects, as well as to large-scale distributed system projects for C&I customers. The company’s EPC services are complete turnkey solutions, including system design, procurement, installation, system testing and commissioning.
Long-term Service Agreements (LTSA)
The company has approximately 3.1 GWh of operating battery energy storage projects contracted under long-term service agreements, all of which were battery energy storage projects previously executed by the company’s e-STORAGE platform.
Products and Services Offered in the company’s Recurrent Energy Segment
Solar Power and Battery Energy Storage Asset Sales
The company develops, builds and sells solar power and battery energy storage projects. The company’s Recurrent Energy business develops projects primarily in the U.S., the EU, U.K., Brazil, Mexico, Chile, Colombia, Australia, Taiwan, Japan, China and Korea. The company’s global project development activities include sourcing land, interconnection agreements, structuring PPAs, obtaining permits and other requirements.
The company has experienced continued pipeline expansion and strong project development. As of January 31, 2024, the company had a total global solar pipeline of 27.3 GWp and a battery energy storage project development pipeline of 54.8 GWh.
The company actively pursues suitable buyers for its solar power and battery energy storage projects.
Electricity Revenue from Operating Portfolio
The company operates certain of its solar power plants and generate income from the sale of electricity. The electric power generated by the company’s solar power projects will generally be sold under long-term PPAs or VPPAs with public utilities, licensed suppliers, corporate offtakers, and commercial, industrial or government end users. As of January 31, 2024, the company had a fleet of solar and battery energy storage plants in operation with an aggregate net capacity of approximately 1,005 MWp and 600 MWh, respectively.
Power Services (O&M)
In 2023, the company provided power services through long-term operations and maintenance (O&M) contracts, with 8.2 GW of contracted projects, primarily in North America, Europe, Japan, Australia and South Africa. Power services include monitoring, inspections, repair and replacement of project equipment and site management and administrative support services for solar projects in operation. The company has deployed a number of unique technologies including semi-automated module washing, autonomous vegetation management, machine learning technologies in predictive maintenance and drone inspection. The company continues to invest in developing these technologies and other areas of the company’s service offering.
Asset Management Services
In 2023, the company provided asset management services primarily in North America and Japan.
Supply Chain Management
CSI Solar Segment
The company’s CSI Solar segment depends on its ability to obtain a stable and cost-effective supply of polysilicon, solar ingots and wafers. The company’s silicon wafer agreements set forth price and quantity information, delivery terms and technical specifications. While these agreements usually set forth specific price terms, most of them also include mechanisms to adjust the prices, either upwards or downwards, based on market conditions. Over the years, the company has entered into a number of long-term supply agreements with various silicon and wafer suppliers in order to secure a stable supply of raw materials to meet the company’s production requirements. Under the company’s supply agreements with certain suppliers, and consistent with historical industry practice, the company makes advance payments prior to scheduled delivery dates. These advance payments are made without collateral and are credited against the purchase prices payable by the company. In 2023, the company purchased all of its silicon raw materials used in the company’s solar modules from third parties. From time to time, the company has entered into long-term supply purchase agreements, primarily for silicon raw materials, especially in the period of the tight supply of upstream raw materials. The company plans to continue to diversify the company’s external polysilicon and wafer suppliers.
Recurrent Energy Segment
The company’s CSI Solar segment supplies part of the solar modules and battery energy storage products used in its Recurrent Energy segment. The company leverages on its scale of operations and have increasingly consolidated the company’s procurement operations. With centralized procurement, the company is able to secure more competitive arrangements with its major suppliers for the company’s project construction, thereby enhancing the company’s ability to compete on cost given the large procurement quantities.
Manufacturing, Construction and Operation
CSI Solar Segment
The company assembles its solar modules by interconnecting multiple solar cells by tabbing and stringing them into a desired electrical configuration. The company lays the interconnected cells, laminate them in a vacuum, cure them by heating and package them in a protective lightweight anodized aluminum frame or steel frame. The company seal sand weatherproofs its solar modules to withstand high levels of ultraviolet radiation, moisture and extreme temperatures. The company mostly uses automated equipment to enhance the quality and consistency of its finished products and to improve the efficiency of the company’s manufacturing processes. Key equipment in the company’s manufacturing process includes automatic laminators, simulators and solar cell testers. The design of the company’s assembly lines provides flexibility to adjust the ratio of automated equipment to skilled labor in order to maximize quality and efficiency.
The company intends to use substantially all of the silicon ingots that the company manufactures to supply its own silicon wafer plants, substantially all of the silicon wafers that the company manufactures to supply its own solar cell plants and substantially all of the solar cells that the company manufactures to produce its own solar module products. The company also intends to use some of the solar modules the company produces in its solar power projects.
Recurrent Energy Segment
The company develops, constructs, maintains, sells and/or operates solar power and battery energy storage projects in the U.S., the EU, the U.K., Brazil, Mexico, Chile, Colombia, Australia, Taiwan, Japan, China, and Korea. The company engages in all aspects of the development and operation of solar power and battery energy storage projects, including project selection, design, permitting, engineering, procurement, construction, installation, monitoring, operation and maintenance. For the solar power and battery energy storage projects that the company constructs, the company has the option of either using its own team, hiring third-party contractors, or a combination of both.
The company’s solar power and battery energy storage projects development process primarily consists of the following stages:
Market due diligence and site selection. The company searches for project opportunities globally with the goal of maintaining a robust and geographically diversified project portfolio. The company’s business team closely monitors the global solar power and battery energy storage projects market and gathers market intelligence to identify project development opportunities. The company’s development team prepares market analysis reports, financial models and feasibility studies to guide the company in evaluating and selecting solar power and battery energy storage projects. As the company considers undertaking new solar power and battery energy storage projects, the company weighs a number of factors including location, local policies, political and regulatory environment, financing costs and potential returns.
Permitting and approval. The company either obtains the permits and approvals necessary for solar power and battery energy storage projects itself or the company acquires projects that have already received the necessary permits and approvals. The permitting and approval process for solar power and battery energy storage projects varies from country to country and often from region to region within a country.
Financing. The company typically includes financing plans for its projects in the company’s financial models and feasibility studies. The company finances its projects through the company’s working capital and debt financing from local banks or international financing sources that require the company to pledge project assets or provide parent guarantees.
Project design, engineering, procurement and construction. The company’s engineering team generally designs solar power and battery energy storage projects to optimize performance while minimizing construction and operational costs and risks. The engineering design process includes the site layout and electrical design as well choosing the appropriate technology, in particular module, inverter and battery energy storage system configuration. The company generally uses solar modules and battery energy storage products produced by CSI Solar, and procure inverters and other equipment from third-party suppliers.
The company has operating solar projects in the U.S., Brazil, Japan, Argentina, China, and Mexico. After a project is connected to the grid, the company regularly inspects, monitors and manages the project site with the intention to maximize the utilization rate, rate of power generation and system life of the project.
The company operates a monitoring center in Guelph, Ontario, Canada, which adopts the global monitoring platform (‘REView’) to monitor the operational performance data in real time, to automatically receive alerts about exceptions, and to automate the reporting of performance, technician work orders, warranty claims, spare parts, health and safety incidences, manage system alarms and reports, all of which can be accessed through cloud applications. The company’s proprietary algorithms analyze the performance of the self-owned and third party power plants that the company operates and maintains on a daily basis and identify potential problems. For example, they raise alarms when inverters or strings are under-performing.
Quality Control and Certifications
The company has registered its quality control system according to the requirements of ISO9001:2015 and IEC62941 standards. TÜV Rheinland Group, a leading international service company that documents the safety and quality of products, systems and services, audits the company’s quality systems. The company inspects and tests incoming raw materials to ensure their quality. The company monitors its manufacturing processes to ensure quality control and the company inspects finished products by conducting reliability and other tests.
The company also maintains various international and domestic certifications for its solar modules. For example, the company has obtained IEC61215/ IEC61730 certifications for sales of the company’s modules in Europe, UL61730 certifications for sales of the company’s modules in North America, and other necessary certifications for sales of the company’s modules in China, Japan, Korea, India, Brazil, Australia, Colombia, Israel, Italy, the U.K., Indonesia, etc. The IEC certification is issued by Verband Deutscher Elektrotechniker, or VDE, and the UL certification by Canadian Standards Association, or CSA. The company’s module products satisfy the latest standards, including IEC 61215:2021 / IEC61730:2023, UL61730 Ed.2-2022 and regional regulations, and have achieved high California Energy Commission, or CEC, PVUSA test condition ratings. Further, the company’s module products have passed additional extended stress program qualifications such as salt mist testing, ammonia testing, PID testing, as well as extra-standard or multiple times testing programs with many variants from PVEL or VDE. The company also continuously improves all required steps of silicon, ingot, wafer, cell and module to maintain competitiveness of carbon footprint certification for the French market special tender requirements, and the company’s TOPCon modules are certified for solar tender under the Programmation Pluriannuelle de l’energie (‘PPE2’). For Korea market, the company obtained carbon footprint certification issued by Korea New & Renewable Energy Center, or KNREC, with competitive Grade 2 ranking in 2023, being one of the first module manufacturers outside of Korea to obtain this certification.
The company’s PV test laboratory is accredited by CNAS according to ISO17025 quality management standard, and has been approved into various Data Acceptance Program, namely by CSA, VDE, and the China General Certification, or CGC, in China. The PV test laboratory allows the company to conduct some product certification testing in-house, which decreases time-to-market and certification costs, as well as exhaustive product and component reliability research to drive improvements in product durability.
The company’s Power Conversion System (‘PCS’) for storage has obtained GB/T34120/GB/T34133 certifications in China. The company also maintained various certifications according to local business requirements for some of the company’s PV inverters, including IEC62109/62116 safety certification and CQC certification in China, KSC 8565/8567 in Korea, RS097 in South Africa, 140/515 in Brazil and EN50549-1/EN50549-2/CEI0-21/CEI0-16/RD1699/NTS2.1/VDE4105/PPDS in Europe. The company’s other products are undergoing the necessary certification processes before entering the relevant markets. With these certifications in place, the company’s PV inverters could meet grid connection requirements in most regions around the world.
Additionally, the company maintains various certifications for SolBank, the company’s proprietary DC battery storage systems, such as UL9540A thermal runaway certification, UL1973 and UL9540 safety certification in North America, GB/T36276 certification in China, and IEC62619 certification in Europe, Australia, Japan and South America. The company is one of the first companies to complete modeling assessments in accordance with the NFPA69 fire safety regulations in the U.S. With these certifications, SolBank could be sold and applied in the global battery storage market.
Sales, Marketing and Customers
CSI Solar Segment
The company’s primary customers are distributors, system integrators, project developers and installers/EPC companies.
The company markets and sells solar modules worldwide for residential, commercial and utility-scale solar energy projects and solutions. The company primarily sells its products to distributors and large-scale installers through the company’s own, home-grown sales teams, who operate throughout Europe, the Americas and the Asia-Pacific regions.
The company’s marketing activities include brand sponsorship, social media discussions and digital marketing. The company’s teams also develop channel marketing programs to support the company’s customers in their marketing of the company’s business and products, in addition to providing them with various services such as product training, new product briefing, and sales training. Furthermore, the company’s marketing team focuses heavily on public relations and crisis management to safeguard the company’s public image. By working closely with the company’s sales teams and other leading solar research companies, the company’s marketing team provides up-to-date market information on a constant basis, supporting the efforts of the company’s sales team. The company’s marketing staff is located throughout the Americas, China, Europe, Japan and Australia.
The company sells its standard solar module products primarily under three types of arrangements: sales contracts to distributors; sales to systems integrators, installers/EPC companies and project developers; and OEM/tolling manufacturing arrangements.
The company targets its sales and marketing efforts for the company’s specialty solar products at companies in selected industry sectors, including the automotive, telecommunications and LED lighting sectors. As standard solar modules increasingly become commoditized and technology advancements allow solar power to be used in more off-grid applications, the company intends to increase its sales and marketing efforts on the company’s specialty solar products and capabilities. The company’s sales and marketing team works with the company’s specialty solar products development team to take into account changing customer preferences and demands to ensure that the company’s sales and marketing team is able to effectively communicate to customers the company’s product development changes and innovations. The company intends to establish additional relationships in other market sectors as the specialty solar products market expands.
As the company expands its manufacturing capacity and enhance the company’s brand name with its system solutions offering, the company continues to develop new customer relationships in a wider range of geographic markets to further decrease single market dependency. The company significantly increased its total number of buying customers and achieved leading market share in North America, Japan, South-Africa and Brazil, which the company maintained and grew further. In 2021, the company started to produce and sell its own CSI single-phase inverter portfolio to complement the already established and growing overall CSI branded inverter sales. The company was one of the leading turnkey EPC PV-system providers in Australia in 2018 and 2019 and a key system kits/packages and turnkey system provider in Brazil since 2018. In the U.S., the company has been recognized as a top 10 system/inverter supplier since 2019. The company has shifted away from the full EPC service model and is offering and helping the company’s customers with system design and system optimization simulation and support. In 2022, the company has successfully launched the company’s first CSI developed and manufactured 3-phase string inverter for commercial and small utility-scale applications and the company plans to further grow its own CSI string inverter portfolio. In 2023, the company launched its 1500Vdc 320KW string inverter and 1500Vdc 200KW string PCS products, and scaled the company’s production capacity to 8 GW annually. By the end of 2023, the company’s product power range spans from 5 KW to 350 KW, covering residential, commercial, and utility applications. The company plans to further invest in research and development, and introduce more compatible, reliable and cost-effective products and solutions to the market.
In general, the company is continuously growing its direct sales channel to sell modules and other solar system components (as system packages or as stand-alone components) directly to EPC, developer as well as contractor and installer, to lower customer concentration and to reduce payment risks and demand fluctuation risks. In order to access small contractors and installers which the company does not directly serve, the company maintains a strong sales channel and business relationship with key distribution partners. In parallel, the company has expanded its key account and utility-scale sales channel and gained market share as the company benefited from a global growth in demand for mid-scale to large-scale solar power plants, enabled through the company’s high efficiency large format module portfolio for LCOE optimized large commercial and utility-scale project usage.
Solar System Kits
A solar system kit is a ready-to-install package consisting of solar modules produced by the company and components, such as inverters, racking system and other accessories, supplied by third parties. In 2023, the company sold approximately 3.9 GW of system kits primarily in China, Japan and Brazil.
Battery Energy Storage Solutions
The company leverages its vast customer and supply chain network to offer competitive solutions for stand-alone battery energy storage offerings or ‘Photovoltaic + Storage’ hybrid integrated solutions. The company also continues to prioritize its R&D and investments into battery energy storage product and technology development to further the company’s advancement into downstream product, technology, and manufacturing, as well as upstream project integrated battery energy storage solutions. As a result, the company has developed its proprietary utility-scale battery energy storage solution, SolBank. This solution is specifically engineered for utility-scale grid connected battery capacity storage installations in stand-alone projects or hybrid projects, in conjunction with renewable energy generation equipment such as wind or solar power technologies. In addition, the company has launched the company’s own residential battery energy storage system, EP Cube, focusing on residential and small commercial battery energy storage installations of up to 119.9 kWh. With this solution, the company expects generated solar power to be stored for usage during subsequent electricity peak rate periods, for peak consumption shaving, and for independent or resilient power supply in case of emergencies and grid outages.
As of January 31, 2024, the company had a total project turnkey pipeline of around 63 GWh, which includes both contracted and in-construction projects, as well as projects at different stages of the negotiation process. In addition, the company had approximately 3.1 GWh of operating battery energy storage projects contracted under long-term service agreements, all of which were battery energy storage projects previously executed by the company’s e-STORAGE platform.
As of January 31, 2024, the contracted backlog, including contracted long-term service agreements, was $2.6 billion. These are signed orders with contractual obligations to customers, providing significant earnings visibility over a multi-year period.
Recurrent Energy Segment
The company develops, constructs, maintains, sells and/or operates solar power and battery energy storage plants primarily in the U.S., the EU, the U.K., Brazil, Mexico, Chile, Colombia, Australia, Taiwan, Japan, China and Korea. The company also provides power services (O&M) and assets management services. The company sells its projects to utilities, independent power producers, and energy investors. Customers for the company’s power service (O&M) and asset management services include solar project developers and owners.
In order to continue to grow the company’s Recurrent Energy segment, the company conducts market due diligence, routinely meet with industry operators and interested investors, and attend industry conferences and events to identify project development opportunities.
Solar Project Development
As of January 31, 2024, the company’s total project pipeline was 27.3 GWp, consisting of 1.9 GWp in construction, 5.5 GWp of backlog, 4.6 GWp of advanced pipeline, and 15.2 GWp of earlier stage pipeline.
Operating Solar Power and Battery Energy Storage Plants and Sale of Electricity
In addition to the company’s project backlog, the company had a portfolio of solar power plants in operation totaling around 1 GWp as of January 31, 2024.
As of January 31, 2024, the company had 600 MWh net of battery energy storage in operation, of which 280MWh represents a 20% equity interest in the 1,400 MWh Crimson battery energy storage project in California.
Battery Energy Storage Project Development
The company has been actively developing utility-scale solar plus battery energy storage hybrid projects, as well as stand-alone battery energy storage projects. Since 2021, a large part of the company’s projects under development includes the co-hosting of battery energy storage facilities with solar power plants on the same piece of land. By using a single interconnection point for each project to serve the solar and battery energy storage energy load, the company expects to significantly enhance the efficiency and the value of the company’s battery energy storage development pipeline.
In addition, the company’s track record includes several storage tolling agreements with a variety of power purchasers, including community choice aggregators, investor-owned utilities, universities, public utility districts, and development services agreements to retrofit operational solar projects with battery energy storage, many of which were previously developed by the company.
Customer Support and Service
The company typically sells its standard solar modules with a fifteen-year or twenty-five-year warranty against defects in materials and workmanship and a twenty-five to thirty-year linear power performance warranty that guarantees the actual power output of the company’s modules.
The company warrants its battery energy storage products for a specific amount of time against performance or manufacturing defects. The standard warranty is typically for an initial term of 1 to 5 years from the date of installation, and is accounted for as an assurance-type warranty, which provides a guarantee of quality, limited to specific usage parameters. The customers can separately purchase extended warranties and performance guarantees for up to an additional 15 years. The company has obtained warranties from its suppliers to back up a portion of the company’s battery energy storage warranties.
For solar power and battery energy storage projects built by the company under EPC services, the company provides major equipment warranty and a limited workmanship or balance of system warranty against defects in engineering, design, installation and construction under normal use, operation and service conditions generally for a period of two to five years following the energizing of the solar or battery storage project. In resolving claims under the workmanship or balance of system warranty, the company has the option of remedying through repair, refurbishment or replacement of equipment. The company has also entered into similar workmanship warranties with the company’s suppliers to back up the company’s warranties.
As part of the company’s energy business, before commissioning solar power and battery energy storage projects, the company conducts performance testing to confirm that the projects meet the operational and capacity expectations set forth in the agreements. In limited cases for solar power projects, the company also provides for an energy generation performance test designed to demonstrate that the actual energy generation for up to the first three years meets or exceeds the modeled energy expectation (after adjusting for actual solar irradiation). In the event that the energy generation performance test performs below expectations, the appropriate party (EPC contractor or equipment provider) may incur liquidated damages capped at a percentage of the contract price. In certain instances, a bonus payment may be received if the energy generation performance test performs above expectations.
The company’s customer support and service function handles technical inquiries and warranty-related issues. In recent years, the company expanded its capacity in these areas to better enable the company to handle its customers’ questions and concerns in a timely and professional manner.
Competition
CSI Solar Segment
The company competes with American companies, such as First Solar, and Asia-based companies such as Longi, Trina, Jinko, JA Solar and Tongwei. The company competes with battery energy storage companies, such as Tesla, Fluence and Sungrow.
Research and Development
The company’s research and development costs were $100,844 for the year ended December 31, 2023.
Environmental Matters
The company has finished establishing the company’s internal ISO14064:2018 Green House Gas (‘GHG’) quantification and reporting system under guidance of 3rd party Societe Generale de Surveillance (SGS), to identify, quantify and report the company’s GHG emissions and removals at the organization level, setting up solid ground for continuous GHG emissions reduction.
The company’s products must comply with the environmental regulations of the jurisdictions in which they are installed. The company make efforts to ensure that the company’s products comply with the EU Regulation (‘EC’) No 1907/2006 concerning the Registration, Evaluation, Authorization and Restriction of Chemicals (‘REACH’). The company’s system solutions product lines, including string inverters, also comply with the European Union’s RoHS (Restriction of Hazardous Substances) Directive 2011/65/EU and its amendments.
The company also strictly adhere to Toxicity Characteristic Leaching Procedure (‘TCLP’) testing of the company’s photovoltaic module portfolio to monitor the presence of any toxic metal substances (arsenic, barium, cadmium, chromium, lead, mercury, selenium, silver) according to TCLP Standard EPA Test Method 1311, as issued by the U.S. Environmental Protection Agency (‘EPA’) under the Toxic Substances Control Act (‘TSCA’) for landfill disposal of modules. The company adopted a new advanced TCLP sampling method developed by Arizona State University to improve sampling accuracy and testing results.
Environmental Regulations
The major environmental laws and regulations applicable to the company include the PRC Environmental Protection Law, which became effective in 1989, as amended and promulgated in 2014, the PRC Law on the Prevention and Control of Noise Pollution, which became effective in 1997, as amended and promulgated in 2018, the PRC Law on the Prevention and Control of Air Pollution, which became effective in 1988, as amended and promulgated in 1995, 2000, 2015 and 2018, the PRC Law on the Prevention and Control of Water Pollution, which became effective in 1984, as amended and promulgated in 1996, 2008 and 2017, the PRC Law on the Prevention and Control of Solid Waste Pollution, which became effective in 1996, as amended and promulgated in 2004, 2013, 2015, 2016 and 2020, the PRC Law on Evaluation of Environmental Affects, which became effective in 2003, as amended and promulgated in 2016 and 2018, the PRC Law on Promotion of Clean Production, which became effective in 2003, as amended and promulgated in 2012, and the Regulations on the Administration of Construction Project Environmental Protection, which became effective in 1998, as amended and promulgated in 2017.
Some of the company’s PRC subsidiaries are located in Suzhou, China, which is adjacent to Taihu Lake, a nationally renowned and protected body of water. As a result, production at these subsidiaries is subject to the Regulations on the Administration of Taihu Basin, which became effective on 2011, the Regulation of Jiangsu Province on Preventing Water Pollution in Taihu Lake, which became effective in 1996 and was further revised and promulgated in 2007, 2010, 2012, 2018 and 2021, and the Implementation Plan of Jiangsu Province on Comprehensive Treatment of Water Environment in Taihu Lake Basin, which was promulgated in February 2009 and amended in 2013.
Certain of the company’s PRC subsidiaries, such as CSI New Energy Holding Co., Ltd., or CSI New Energy Holding, Canadian Solar Manufacturing (Luoyang) Inc., or CSI Luoyang Manufacturing, were once HNTEs and enjoyed preferential enterprise income tax rates. These benefits have, however, expired. In 2022, only Suzhou Sanysolar Materials Technology Co., Ltd, Changshu Tegu New Material Technology Co., Ltd, CSI New Energy Development (Suzhou) Co., Ltd (formerly known as Suzhou Gaochuangte New Energy Development Co., Ltd), Canadian Solar Photovoltaic Technology (Luoyang) Co., Ltd. and Changshu Tlian Co., Ltd were HNTEs and enjoyed preferential enterprise income tax rates.
History
Canadian Solar Inc. was founded in 2001. The company was incorporated pursuant to the laws of the province of Ontario in 2001.
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