Canadian Solar (CSIQ)

[dydo 1,558]

Canadian Solar Inc. (the "Company" or "Canadian Solar") (NASDAQ: CSIQ), one of the world's largest solar companies, today announced the delivery 26 MW of its high quality and high-performing CS6P-P solar power modules to EPC Contractor TSK Solar for the "San Fermin" solar power plant installation in Puerto Rico, co-developed by firms Uriel Renewables inc. and Coqui Power LLC. The solar power plant is located in the North Eastern town of Loiza, a region that regularly faces adverse weather conditions such as hurricanes, tropical storms and flooding. Due to the specific nature of the project and its location, the project's electrical equipment were installed on structures that elevated them two to four meters above ground, and have also been designed to withstand winds of up to 260 kilometers per hour. http://phx.corporate-ir.net/phoenix.zhtml?c=196781&p=irol-newsArticle&ID=1740448&highlight=

[Guest angelp]

For your information, this is not the first cooperation project between Spanish EPC company TSK Solar and CSI. In 2011 TSK completed 5 MW solar power plant in France utilizing CSI modules (La Génétouze project): http://www.tsk.es/noticias/298-new-solar-power-plant-in-france

[dydo 1,558]

Good to know that. Locations are getting more and more off the regular channels. I picked Spain and Portugal as potential locations for solar manufacturing for Chinese companies. Not only European markets standing wide open but so South American with those options. Yingli sold 10.5MW to Chile in Q3 and Jinko has big plans for Brazil.

[Guest angelp]

General manager of Canadian Solar USA, Alan King answers to the question: "What has proven to be the most difficult issue facing the solar industry during the past year and what are some key strategies to ensure long-term growth?"

http://www.renewableenergyworld.com/rea/news/article/2012/09/the-question-day-1-what-is-the-most-difficult-issue-facing-the-solar-industry

[Guest angelp]

Interesting piece of information: 300 MW Ontario facility is working at full capacity to produce modules for Canadian Solar Solutions' power plants: http://www.greenenergyfutures.ca/episode/15-house-rising-sun-solar-manufacturing-canada

[Guest angelp]

PetersenDean Roofing and Solar Announces That It Can Design and Build Roof Top Solar Power Systems at a Profit, Without the Need for the Investment Tax Credit Read more here: http://www.heraldonline.com/2012/10/24/4360180/petersendean-roofing-and-solar.html

[Guest angelp]

Under the background of anti-dumping and anti-subsidy, the PV industry confronted the great challenges. In this situation, two Jiangsu PV enterprises singed 3 billion orders in Australia which was greatly encouraged the domestic PV industry. The two companies are Canadian Solar Company and Zhongli Sci-tech Group.

http://www.glassinchina.com/news/newsDisplay_18925.html

Zhongli is the parent company of Talesun. 3B is probably in yuans? Somebody in China can confirm.

[dydo 1,558]

still 500M, I will ask

[dydo 1,558]

this is what I got back when I asked about this

\

the original article didn't mention the amount is in RMB or USD. Zhongli said the 2.7 billion is for 230MW module

Among the amount, 140MW is through power station building. The target selling amount of Zhongli in this year is 800MW, and power station selling amount is 350MW(270MW in domestic, 80MW overseas)

but I think the reality is far from its target...

the order for CSI is 20MW, both of them sign the contract on Australia new energy international exhibition I don't know if the name of the exhibition is correct in English

[Guest angelp]

http://www.renewableenergyinstaller.co.uk/2012/11/q-a-canadian-solar/

[Guest nanofrogfish_spf]

Hey angelp...thought I'd come keep you company over here on the CSIQ board...

[Guest nanofrogfish_spf]

This news is a couple months old now, but I hadn't seen anything released on it before; http://www.lexology.com/library/detail.aspx?g=bbf3db82-2248-46e7-b559-de7a90893d37 Looks like the Court was unanimous in shooting down every one of Skypowers claims. The judgment appears to be the correct one based on the judicial commentary. What was at stake were 118 applications that were submitted for FIT 1.0, but later were required to re-apply those for FIT 2.0. The lawsuit was filed when the proposed rule changes were published. CanSIA had the following comment about the proposed changes as they had been written; "As residential uses are not typically defined in by-laws as secondary uses in most Non-Agricultural designations this effectively eliminates all available private land in southern Ontario from potential use in solar development." The result of this was Skypower sued the OPA for $100 million, as their 118 projects were in danger of getting rejected due to the new, retroactive zoning restrictions. Since then, working with CanSIA the OPA revised the rules and added many exceptions to the zoning restrictions. I’m guessing that many of the Skypower projects will still be viable under these new rules, but the slow painful process of re-filing the applications must be done, and of course the profits they make under the new FIT 2.0 rates will also be lower. This would result in a somewhat lower profit margin for any projects that CSIQ would be involved with, but they are still pretty decent and should result in a nice steadyproject pipeline there for many years to come. None of the 16 projects that Skypower had sold to CSIQ were affected under these rule changes, since their FIT 1.0 contracts had already been completed. To date, the OPA has been extremely slow in processing and approving applications. The new FIT 2.0 rules are supposed to help improve on that. I would like to hear some update on what’s going on with the Skypower/CSIQ joint venture...maybe we’ll get something tomorrow in the CC, but more likely next year in the Q4/2012YE CC.

[dydo 1,558]

I am curious how they do on shipments? I hope they met them so they can rocket to the top.

[Guest nanofrogfish_spf]

odyd...you read my mind! If they hit both their shipment & GM guidance (which I think they will since they didn't pre-warn), guide 500MW+ for Q4 (even if they miss YE guidance by 100MW or so), confirm that they will hit 60c or less on costs, and pull in that $100 mil from the expected sale of 2 of the Transcanada solar farms, then the continuing successful execution of their business plan will be confirmed and I believe that will finally separate them from the rest of the Chinese pack for good. If it's a bad release, I may go into hiding for awhile...

[Guest angelp]

Published in conference materials from Nov 5th. Link to technical paper: http://wenku.baidu.com/view/78852ad533d4b14e85246810.html

[Guest nanofrogfish_spf]

Looks like the just barely hit the low end of guidance, but Q4 projections are definitively disappointing. Part of that is those Transcanada projects are not be recognized in Q4, but rather in Q1-2013. It seems like all projects in Canada are moving towards revenue recognition slower than expected. The only real bright spot was they added over 100MW in US projects, and added another 10MW in Canada with Penn energy. Although 2013, especially the back end, looks very profitable...my expectational time-table has certainly been pushed back again..

[Guest nanofrogfish_spf]

It's interesting that CSIQ made a similar comment as TSL did about drawing a line in the sand concerning pricing. Is it possible that the Chinese government has gotten involved (or maybe they all just got together on their own), to the extent that the Tier-1 solars have stopped the continuous selling price declines, in order to smooth over all the dumping allegations, while telling them that they will support them until things get back to normal? Just conjecture...but interesting that both made very similar statements on this...

[dydo 1,558]

They probably made the decision on the fact that in order to be a tier-1 someone needs to say stop to drop of ASP. Other makers are shutting down so you have no staying power with them. BMWs do not chase Honda Civic pricing. If they can hold on to this among themselves there is a chance. Their ability to garner projects is the largest differentiation imho. They will be coming on the top with it.

[dydo 1,558]

Overall cost per watt increased https://solarpvinvestor.com/analysis/chinese-peers https://solarpvinvestor.com/analysis/quarters-half-years/2012-qs-and-h1/q3-2012

[Guest nanofrogfish_spf]

There was quite a lot of detail provided this time around in the CC concerning the project business. I have updated a spreadsheet accordingly that I've made to keep track of these utility scale projects and their probable gross profits.

Revenue by quarter is much more accurate now, as before I had to “smooth the curve” over a time period, since I didn’t have enough specifics. This only covers the known utility scale projects, and includes 7-TransCanada, 16-Skypower, 243MW US, 100MW China and 28.7MW Penn Energy (Q3 Stonepeak was remove). I assumed projects with early OPA FIT 1.0 rates at 25% GM, and new OPA rates (Penn) at 20% GM. Revenue for US projects/EPC work based on 120MW at $2.75/MW in 2013 and 123MW at $2.25, with 18% GM. For the 16 Skypower projects, I deducted the $185 mil. purchase price from my est. rev. of $835 mil. (for easy math), and assumed they make 20% on the remaining $650 mil. For China EPC, I assumed 100MW by Q4 next year at $1.75/W and 12% GM.

I revised the Skypower project revenue recognition to % of completion method. For % of completion I averaged over the

construction/commission period, with a 1-quarter delay, that is somewhat back-ended. I think this is pretty close now as to what to expect in 2013.

Total project size (includes a combo of AC & DC ratings) is now 652.7MW, with $1.988 Billion in rev ($2.173 Bil. if you add

back in the $185 mil Skypower purchase), at an average 19.9% GM or $395 million GP. Quarterly total gross profits (in millions) and GP per share as follows;

This is far from perfect, but it looks like it really is going to peak in Q4, which makes sense from a construction standpoint. The 2013 numbers are probably pretty much set, but the 2014 number obviously have a lot of room to grow.

[explo 706]

Nice work, thanks.

[dydo 1,558]

Nano try to attach the exel file, if you find it useful

[Guest nanofrogfish_spf]

odyd...good job again on the CSIQ article. I've attached the excel spreadsheet that I had generated. Any comments on assumptions, etc would be greatly appreciated from everyone. The sheet also includes some ballpark EPS "what-ifs" based on various $GP/MW scenarios on the profitability of the rest of their non-utility scale business.

[dydo 1,558]

Thank you, great looking spreadsheet. Non utility scale 5 cents profit could be achievable with below 0.60 and the 0.65 ASP, The heavy COGS adjustments today for all of those companies, granting they will be able to pay debts, are saving them taxes. Even with my current dissatisfaction about Trina, I think they will be fine. Some weird things on Suntech. Wuxi was going to buy bonds for the company etc, they moved the Shi out as he wanted the company to go bankrupt?

[Guest redsolar]

Nano, Thanks! Good effort there with the spreadsheet.

[Guest nanofrogfish_spf]

Thanks, I just got done re-reading the CC. I had mistaken their "up to 130MW" comment about US projects as revenue recognition, but now I realize it was "in construction". So I would average that row out a couple more quarters into Q2-2014. I think this is a more likely scenario...

[Guest nanofrogfish_spf]

Was just looking at Skypower's website, and under the career tab they posted an open position in September for a project manager. Not that that's newsworthy, but the company background summary was pretty interesting;

Background:

Boasting one of the most impressive pipelines of solar projects in North America, SkyPower Global is one of the world's largest developers and owners of solar energy projects. SkyPower's portfolio includes 250 megawatts (MW) of awarded power purchase contracts, an additional 67 megawatts (MW) of installed capacity operating today and a pipeline total of more than 2.0 gigawatts (GW) at various stages of development worldwide. SkyPower sources, develops, finances, owns and operates solar energy projects from the initial discovery stages through to commercial operation. We have offices in 22 countries supporting our development efforts in over 70 countries around the world. SkyPower is committed to helping communities meet their increasing demands for greater investment in clean, non-emitting solar energy. For more information about SkyPower, please visit www.skypower.com.

They had stated they had over a 2 GW pipeline in the previous CSIQ press releases, which is impressive in itself, but what I didn't know is that they have offices in 22 countries supporting efforts in 70 counties! I wonder if this is part of the CSIQ/Skypower global joint venture build-out. Since the US company CIM Group owns Skypower, there is a lot of financial muscle behind this partnership.

I expect we'll be hearing a lot more about this next year, but it certainly bodes well for CSIQ's future expanding global project presence and potential pipelines.

[Guest nanofrogfish_spf]

CSIQ just updated their IR Presentation. Not much has changed...updated their cost slide, some project slides, financial slides, etc. One noteworthy revision though, was the Canadian factory's module capacity is now listed at 330MW...in the last one (Aug), it was listed at 220MW...that's a 50% capacity increase (business must be good up there). http://phx.corporate-ir.net/phoenix.zhtml?c=196781&p=irol-presentations

[Guest nanofrogfish_spf]

On October 15th, CSIQ announced their exclusive partnership with PetersenDean.

“PetersenDean Roofing and Solar is the largest privately held roofing and solar contractor in the United States. Headquartered in Fremont, California, and operating in 15 regional offices across the United States, PetersenDean offers something few other companies can: the ability to guarantee all products and installations above the roofline."

On October 24th, PetersenDean announced their new Power Saver Series, with some of the following comments;

“PetersenDean Roofing and Solar, Inc. announced today that it can engineer, procure and construct its Power Saver Series line of roof top solar power systems without the need for the Investment Tax Credit to provide affordability for consumers and profitability for PetersenDean on each and every system.”

“Petersen, also exclaimed, “I mean, why would anyone lease asolar power system that cost five grand for twenty years and never own it? Our Power Saver Series are power house systems that are all under fifteen grand and the consumer gets to keep the thirty percent tax credit for now. You talk about a no-brainer.””

““My goal was to be free of the ITC in 2015, so we are way out ahead of schedule and with continued advances in technology; we see a very bright future for solar power and PetersenDean,” concluded Petersen.

http://www.businesswire.com/news/home/20121024005581/en/PetersenDean-Roofing-Solar-Announces-Design-Build-Roof

So I went and checked out their site for the PowerSaver Series, and I have to agree that for anyone considering solar in the south-west USA, it’s a no-brainer;

http://www.powersaverseries.com/

They basically have 3 size kits; 1.5kW, 3.okW, and 4.5kW. Without any govt. incentives, these systems look like their payback in most areas would be under 9 years ($3.70/W). With the 30% ITC the payback is less than 6-years ($2.60/W). There’s a little video also that states the IRR is 18% on these systems!

And if this is installed with a new or replacement roof from PetersenDean, they’ll knock another $1000 off (and if you act right now, they have a holiday special going on that’s worth another $500 off...).

I would think that the Residential and small Commercial rooftop markets will probably see the largest growth in the coming years. This market doesn’t have the land purchase and development costs of solar farms, and are more efficient

when located at the point of use. And in developing nations especially, the future power structure could shift from AC to

low and high voltage DC only systems, allowing for further cost reductions and greater system efficiencies, further propelling the expansion of rooftop solar systems. CSIQ is involved in one of these experimental installations in China.

The future certainly looks bright for solar ...and CSIQ...

[Guest angelp]

Probably not major piece of news but still indicates CSI is actively building partnership network. http://www.publicityupdate.co.za/?IDStory=50755#IDStory=50755