Canadian Solar Boosts Annual Module Guidance, Shares Jump

Module maker and project developer Canadian Solar handily beat
Q2 expectations on Thursday, reporting module shipments that
outpaced guidance and better-than-anticipated profits. The company
significantly increased its annual module guidance to 8.4 to 8.5
gigawatts, from 7.4 to 7.8 gigawatts.

CEO Shawn Qu said the results put Canadian Solar “in the most
competitive position in the company’s history.” The company’s
stock jumped about 10 percent after its Q2 results went live,
bringing the share price just below $23.

Among the highlights of Canadian Solar’s quarter:

  • Module shipments grew from 1,757 megawatts in Q1 to 2,143
    megawatts in Q2, topping the high end of the company’s quarterly
    guidance.
  • Revenue, at about $1 billion, fell within guidance of $970
    million to $1.01 billion.
  • The company expects full-year revenue of $3.5 to $3.8 billion,
    compared to $3.74 billion last year.

Acting CEO Yan Zhuang, who stepped into the role while Qu was
recently on medical leave, named three factors that encouraged the
bump in module guidance: a rush to safe-harbor modules in the U.S.
ahead of the step down of the investment tax credit; growing demand
from emerging solar markets; and the recent finalization of new
solar policies in China. 

Last year the Chinese government ditched subsidies and caused a
ripple of uncertainty through the market. But recently announced
incentives offer clarity to developers as well as sweeteners for
subsidy-free projects, like priority dispatch. According to Wood
Mackenzie Power & Renewables, China has about 6.4 gigawatts of
subsidy-free projects awaiting grid connection in 2019.

Canadian Solar’s higher-than-expected module shipments will
include bifacial technology, Qu said. The industry-wide shift
towards bifacial modules got another vote of confidence in Q2
when the company signed its largest supply deal to date: a
1.8-gigawatt order with
EDF Renewables, which includes bifacial and traditional modules.
The modules will go to EDF-developed projects in Canada, the U.S.
and Mexico.

Canadian, which
acquired
developer Recurrent in 2015, has built a healthy
development pipeline of its own. Late-stage utility-scale projects,
those expected to be built within the next four years, grew from
3.4 gigawatts in Q1 to 3.6 gigawatts in Q2. The company sold
228-megawatts of solar projects in Q2, most located in the United
States. 

Revenue is expected to decline to $780 million to $810 million
in Q3, Zhuang said, though that could change if the company closes
on a project in Japan, which would nudge revenue closer to $1
billion. 

Module shipments are expected to exceed those in Q2, with 2.2 to
2.3 gigawatts slated for Q3. Zhuang said that number includes 160
megawatts that will go to self-owned projects. Despite the higher
module sales, Zhuang said fewer planned project sales in Q3 have
kept revenue guidance steady with existing annual projections.

“For the whole year, module shipments are up, but we kept the
revenue number more or less the same as before,” added Qu.
“Let’s see, maybe we’ll have a pleasant surprise in
Q4.”

Source: FS – GreenTech Media
Canadian Solar Boosts Annual Module Guidance, Shares Jump