‘Falling solar module costs are behind us’


The contribution made by falling panel costs to the future price of solar power will be minimal, according to one executive at Sino-Canadian manufacturer Canadian Solar.

Yan Zhuang, president of the CSI Solar manufacturing operation of the company which is set for an IPO in China next quarter, today stated: “The era of ever-declining solar module prices is largely behind us.”

The comments were made on the Canadian Solar website as the company presented its fourth-quarter and full-year figures, and explain why the business is moving into energy storage on a big scale. In fact, Canadian Solar chairman and CEO Shawn Qu predicted the business would claim around 10% of this year's U.S. battery storage market.


The manufacturer and project developer had highlighted shortages of panel raw materials polysilicon, PV glass and backsheets in its third-quarter results and, although the associated hit in shipment volumes, margin and revenue was not as stark as feared in the final three months of the year, Zhuang said: “We are approaching the bottom of the solar cost curve,” and indicated near term module price rises.

The CSI Solar business unit chief said polysilicon prices had leapt another 25% “recently” although solar glass costs had started to come down and shipping expenses had shown signs of returning to normality after a Covid-affected year. The hit to Canadian Solar had been partially mitigated by the efforts of its “customers and partners,” said Yan, “who were able to share a portion of the higher costs.”

Canadian appears to be readying to draw a line between its manufacturing and project development operations with the planned IPO, which is expected to take place in the next quarter. CSI Solar will house the manufacturing operation and, Canadian revealed yesterday, its Chinese solar project business will also be bundled into the unit, with the remaining business devoted to non-Chinese project development–generation and battery storage assets.

The storage portfolio held by the company has trebled from less than 3 GWh a year ago to almost 9 GWh, according to Canadian Solar corporate VP Ismael Guerrero, with almost 1 GWh under construction. On the traditional generation side of operations, Canadian said it has a 20.2 GWp solar project pipeline, with 1.6 GWp under construction plus 3.8 GWp within four years of completion. That is despite an accelerated project sell-off in Mexico, Japan, Canada, Italy and the U.S. to help mitigate the revenue hit caused by rising solar production costs.

The numbers

The bottom line saw fourth-quarter shipments fall 5% to 2,998 MW and, although revenue rose 14%, quarter-on-quarter–to US$1.04 billion–the net income for the company fell from the US$9 million banked in July-to-September to US$7 million. In full-year terms, net income fell sharply from US$172 million in 2019, to US$147 million last year, despite net revenue rising from US$3.2 billion to US$3.48 billion over the same period.

With the company repeating its intent to sell off 1.8-2.3 GWp of solar project capacity this year–rising to 4-4.5 GWp in 2025–Canadian said it expects to have shipped 3-3.2 GW of modules this quarter, to generate US$1-1.1 billion in revenue, at a margin of 16-18%. The company expects to ship 18-20 GW of panels this year for revenue of US$5.6-6 billion.

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