Canadian Solar has highlighted the increasing importance of adding energy storage to PV projects and the “significant growth opportunities in the solar-plus-storage market” while reporting its latest quarterly financial results.
Overall, chairman and CEO Dr Shawn Qu reported that the company had “exceeded expectations both on revenue and profits,” despite what had been “challenging market conditions”. The company made gross margins of 21.2% and net revenue of CA$696 million (US$524.5 million) in Q2 2020, which exceeded its guidance of CA$630 million to CA$680 million.
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The vertically-integrated solar company, which supplies PV modules as well as offering development services and turnkey delivery of power plants, said that as of 30 June 2020, its total solar project backlog and pipeline stood at 15.1GWp, including a 4.2GWp project backlog and 10.9GW pipeline.
It also reported an energy storage project backlog and pipeline total of 4,683MWh. This included a 1,201MWh backlog and a 3,482MWh pipeline. Canadian Solar said this was almost double figures reported at the end of the previous quarter.
For the most part, commentaries given by CEO Shawn Qu and executive colleagues to accompany results focused on other areas including plans to list its Module and System Solutions (MSS) business on the Chinese stock market and to increase module shipments year-on-year from 2020 to 2021.However, Qu, and company president and chief operating officer Yan Zhuang both also commented on energy storage activities.
Shawn Qu said that Canadian Solar’s strategy to expand its Energy business worldwide includes “increasing our partial ownership of select solar and storage projects,” alongside growing the overall project pipeline and increasing project sales.
COO and president Yan Zhuang meanwhile said that Canadian Solar is “building up our technological capabilities in the solar PV-plus-storage space, gearing up for new growth opportunities as adoption of clean solar energy accelerates”. Zhuang said this was one of the main strategies the company would employ to drive long-term growth.
In a press release on the Q2 2020 results, Canadian Solar said that it “believes there are significant growth opportunities in the solar plus storage market, given declining battery storage costs, higher capacity needs and accelerating retirements of fossil fuel power plants”.
“The Company further believes it is uniquely positioned to deliver solar-plus-storage solutions to its customers given its integrated business model as a top-tier module technology manufacturer and global project developer, and is committed to expanding its presence in this space,” the press release said.
Additionally, Canadian Solar has mostly developed PV power plants and then sold them on at their notice to proceed (NTP) date or as they reach commercial operation. In some cases, particularly in Japan, the company has instead retained a minority ownership stake, usually around 15%.
The company said that it intends to replicate this strategy widely and in other territories and said the cash flow generated from various revenue streams such as power sales and operations and maintenance (O&M) would be alongside other advantages which could include opportunities to perform energy storage systems integration and optimisation services to such plants.