Canadian Solar expects doubling of energy storage solutions business in 2022

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Canadian Solar shipped just under 900MWh of battery storage in 2021, the first full year of its involvement in the segment, but expects to double that figure this year. 

The vertically-integrated solar PV company’s CSI Solar manufacturing subsidiary shipped 896MWh of battery energy storage system (BESS) technology during last year, while the parent company made total annual PV module shipments of 14.5GW.

As reported by our sister site PV Tech last week from Canadian Solar’s Q4 and full-year 2021 financial results, the company’s gross margin came in above issued guidance at 19.7% for the year, but CSI Solar saw margins come under pressure from spiralling material and logistics costs that have impacted solar manufacturers across the board. 

However, as chairman and CEO Dr Shawn Qu remarked, the battery business is growing fast. The battery storage solutions business contributed to “significant growth” in Q4 revenues year-on-year, at US$1.53 billion a 47% increase from Q4 2020.

Battery storage shipments for 2022 are guided to be in the range of 1.8GWh to 1.9GWh, which is an increase on previously offered guidance of 1.4GWh to 1.5GWh. 

“We will continue to invest in technology and upstream capacity and expect to continue growing our solar module market share. We are also excited by the significant progress and accelerating growth of our battery storage business, which is a large greenfield opportunity for us,” CEO Shawn Qu said.

“As with our other markets, we plan to succeed by introducing innovative products, including our own battery storage product, which we expect to launch in the coming quarters.”

US$150 million raised by Canadian Solar via a share offering late last year was said at the time to be largely earmarked for developing its battery storage solutions capabilities.

CSI Solar’s system integration business wraps up full turnkey integrated BESS solutions complete with performance guarantees. Long-term O&M agreements offered alongside the solutions create a further stable revenue stream, as well as opportunities to augment battery capacity at existing sites. 

As of the end of January, CSI Solar had 300MWh of operational battery storage delivered under long-term service agreement (LTSA) models which generate recurring earnings. It had 2,043MWh of equipment deals for projects contracted or already in construction and expected to be delivered within a year-and-a-half.

A further 390MWh of deals forecasted with a 75% or higher probability of being contracted for within a year and rounding out the CSI Solar pipeline is a further 3,619MWh of project opportunities the company considered to have a less than 75% chance of converting into business but could pursue.  

A late-year 2021 highlight for CSI Solar was the signing in November of a strategic cooperation framework agreement on holistic battery storage system tech innovation with CATL, a world leader in lithium battery manufacturing. 

CSI Solar’s revenues for battery storage solution sales were just over US$222 million for 2021, up from US$7.9 million in 2020.

27GWh battery storage development pipeline of opportunities

Canadian Solar actively develops utility-scale solar PV and energy storage projects through its Global Energy business segment, including standalone battery storage as well as solar-plus-storage. 

That said, nearly all projects developed during 2021 co-locate solar and battery storage, allowing the assets to share a grid interconnection point — often the most valuable piece of project development real estate for either technology. 

The company has signed various tolling agreements for the use of its battery storage projects as well as development services contracts to retrofit existing solar PV plants with batteries. 

All of the developed projects so far are in North America, with an emphasis on the California market. As of the end of January 2022, Canadian Solar had 2,681MWh of battery projects in construction in the North America region. However, 465MWh of its 841MWh backlog was in Latin America, 56MWh in the EMEA region, 20MWh in the Asia-Pacific region excluding Japan and China and 300MWh in China. 

During 2021 Canadian Solar sold on a 1.4GWh battery storage project and a pipeline of 27GWh of development opportunities for storage along with a 24GWp solar PV opportunity pipeline gave the Global Energy business division a “strong platform for growth,” its president Ismael Guerrero said. 

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