Canadian Solar plans $401 million expansion to increase capacity

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Canadian Solar today announced major expansion plans to boost its manufacturing capacity in wafer, cell and module – with an investment of $401 million.

The solar company will expand the wafer capacity to 1.0 GW, cell capacity to 3.4 GW and module capacity to 5.63 GW by December 2016.

The strategy of Canadian Solar is to decrease its reliance on suppliers of wafers and cells in order to improve its cost structure and more deliver target gross margin for its solar module business in the 15 percent to 20 percent range.

Canadian Solar will be spending $104 million in the second half of 2015 and $297 million in 2016 towards capital expenditure to expand the capacity.

The company will expand the wafer manufacturing capacity at its Luoyang plant, Henan Province to 1.0 GW by June of 2016.

Canadian Solar will expand the cell manufacturing capacity at its Suzhou plant, Jiangsu Province to 2.0 GW by the end of 2015.

The company will increase the cell manufacturing capacity at its Funning plant, Jiangsu Province, to 1.0 GW by July of 2016.

In addition, Canadian Solar will commission a new 400 MW cell manufacturing plant in South East Asia in the second half of 2016.

The module manufacturing capacity in 2016 includes 3.0 GW in Changshu, Jiangsu Province, and 1.1 GW in Luoyang, Henan Province, while approximately 1.53 GW will be at existing and new locations outside China, including 500 MW in Canada, 300 MW in Vietnam, 30 MW in Indonesia, 300 MW in Brazil and 400 MW in South East Asia.

Canadian Solar revenue

Canadian Solar said its net revenue fell 7.1 percent to $849.8 million in Q3 2015, while net income of Canadian Solar rose to $30.4 million from $17.9 million.

Americas generated 52.6 percent (71.7 percent) revenue, Asia 41.3 percent (20.4 percent) and Europe and others 6.1 percent (7.9 percent) in Q3.

Solar module shipments recognized in revenue in Q3 2015 included 110.5 MW used in the company’s total solutions, compared to 173 MW in the third quarter of 2014.

Canadian Solar said its solar module shipments were 1,198 MW, of which 1,150 MW were recognized in revenue, compared to 809 MW recognized in revenue in the second quarter of 2015.

“We benefited from strong demand for our modules in the U.S., Japan, China and India. We also made good progress on our Energy business, as we expanded our fleet of operating power plants in Japan and in Canada, grew our pipeline of high quality solar projects in Brazil and China,” said Shawn Qu, chairman and CEO of Canadian Solar.

Canadian Solar expects module shipments of approximately 1,300 MW to 1,350 MW, including approximately 170 MW of shipments to the company’s utility-scale solar projects that may not be recognized in the fourth quarter 2015 revenue. Total revenue of Canadian Solar for the fourth quarter of 2015 is expected to be $930 million — $980 million.

Rajani Baburajan
[email protected]

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