Canadian Solar results dip slightly during Q2, preparations for yieldco continue

Share

While Canadian Solar is seeing the impact of U.S. tariffs on its PV modules sales and the uneven quarter-to-quarter revenues that is standard in the solar project business, its second quarter results were not dramatic.

The company's revenues saw a sequential fall, but were still up 2% year-over-year at US$637 million. And while margins also fell, Canadian Solar managed a healthy 5.1% operating margin with $17.9 million in profit. This could hardly be called a bad quarter, particularly given the ups and downs that the global solar industry has seen in the last few years.

The biggest fall was in shipments, which at 850 MW were well below guidance. U.S. tariffs are causing the company to reroute product, and while it can serve the American market with its Canadian module capacity, the issue of cell sourcing remains.

Canadian Solar suggested during its quarterly conference call that it may address this challenge in the long run either by outsourcing cell production to a nation other than China or Taiwan, or by building factories in nations not affected by tariffs.

However, the fall in shipments was also due to less product shipped to projects, and the company was able to claim fewer project completions during Q2. During the quarter Canadian Solar's Total Solutions business fell to only 31% of revenue.

Despite this Canadian Solar reported substantial operational successes. In its capacity as an engineering, procurement and construction (EPC) contractor, the company reached substantial completion on Canada's largest solar PV project, the 134 MW-DC Samsung Phase 1 Grand Renewable Project. Canadian Solar expects to complete an even larger second phase of this project in the third quarter of 2015.

Additionally, Canadian Solar now has 653 MW of its own PV projects under construction in California. Along with another 553 MW of late-stage projects in California and Texas, the company expects to complete 1.2 GW of projects in the United States during 2016.

Internationally, Canadian Solar is also making progress, with 336 of its projects in Japan receiving grid connection approval. It may also be one of the first companies to build large-scale PV in Brazil, having recently won the rights to develop three PV projects totaling 114 MW in the state of Minas Gerais.

As impressive as this is, more attention is being focused on what Canadian Solar does with these projects after it completes them.

Canadian Solar was one of the first PV manufacturers to move into development and EPC for solar projects, a move which was followed by most tier 1 module makers. However, it is a late comer to the yieldco game, and during its Q2 call revealed that it is not one hundred percent committed to that strategy.

“We continue to make good progress towards our business model transformation into a build, own and operate model, and remain on track in our plan to launch a yieldco,” stated Chief Financial Officer Michael Potter.

However, he also noted recent “volatility around yieldco valuations”, and stressed that the company has alternative plans to monetize its utility-scale assets.

“The yieldcos that serve OECD countries and have strong projects, the yields are still value accretive, but they are not in the ranges that you would wish,” noted Potter on the conference call. “We do have good projects that are in high demand, and we do have alternative plans should that be necessary.”

Popular content

This content is protected by copyright and may not be reused. If you want to cooperate with us and would like to reuse some of our content, please contact: editors@pv-magazine.com.

Share

Related content

Elsewhere on pv magazine...

Leave a Reply

Please be mindful of our community standards.

Your email address will not be published. Required fields are marked *

By submitting this form you agree to pv magazine using your data for the purposes of publishing your comment.

Your personal data will only be disclosed or otherwise transmitted to third parties for the purposes of spam filtering or if this is necessary for technical maintenance of the website. Any other transfer to third parties will not take place unless this is justified on the basis of applicable data protection regulations or if pv magazine is legally obliged to do so.

You may revoke this consent at any time with effect for the future, in which case your personal data will be deleted immediately. Otherwise, your data will be deleted if pv magazine has processed your request or the purpose of data storage is fulfilled.

Further information on data privacy can be found in our Data Protection Policy.