Canadian Solar has reversed plans to halt expansion of its wafer and cell production capacities this year. The Chinese-Canadian manufacturer and developer had said in its third-quarter update last year that no new wafer and cell production lines would be added this year.
The Ontario-headquartered company's first-quarter update, however, saw Chairman and CEO Shawn Qu announce “an acceleration of our upstream capacity expansion plan for 2022.” The CSI Solar manufacturing business, due to be spun out with an initial public offering in China, will now aim to reach 20 GW of annual wafer production capacity this year, up from 11.5 GW currently, and 19.8 GW of cell output, up from 13.9 GW.
With the company's 23.9 GW of annual module production capacity due to rise from the current 23.9 GW to 27.9 GW, in June, the target of reaching 32 GW this year remains unchanged. The effect of rising input costs – specifically polysilicon price inflation cited by CSI Solar President Yan Zhuang – was spelled out in the latest update.
First-quarter net income of $9 million was down from $26 million in the previous window, and $23 million in the first three months of last year. Zhuang said Canadian Solar partially mitigated the rise by raising its own prices and also stockpiled inventories of raw material to hedge against inflation.
During the first quarter, “logistic[s] costs started to come down,” the CSI Solar chief said, with currencies “starting to move in our favor after two years of headwinds.” The company banked a currency gain of $3 million in January to March, up from $1 million in the fourth quarter of last year and a loss of $7 million a year earlier.
Qu said currency gains and bigger sales would help the company to $7 billion to $7.5 billion of revenue this year. The quarterly figures were also helped by a Canadian tax refund which contributed to a three-month tax benefit of $5 million. Total debt rose from $2.5 billion at the end of 2021 to $2.7 billion at the end of March.
Canadian Solar's Global Energy project development business booked a first-quarter net loss of $1 million, down from a $14.7 million loss in the previous quarter and an $85 million profit a year earlier. CSI Solar contributed a $31.9 million quarterly profit, down from $81.6 million, quarter over quarter, but up from a $52.7 million loss a year earlier.
The manufacturer shipped 3.63 GW of panels in the first three months of the year. Canadian Solar expects to ship 4.9 GW to 5.1 GW of modules in the current window for 20 GW to 22 GW this year.
The company owns 800 MWp of solar generation capacity and wants 1.3 GWp in 2026. Global Energy has 1.1 GWp of projects under construction and another 4.2 GWp due to be built within four years, with an emphasis on Latin America.
North America is the focus of the company's energy storage projects at present. The company expects revenue of $2.2 billion to $2.3 billion in the current quarter, at gross margin of 14.5% to 15.5%.
Canadian Solar expects to sell 2.1 GW to 2.6 GW of project capacity this year. It plans to install 1.8 GWh to 1.9 GWh of battery storage capacity.
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