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Canadian Solar (CSIQ)

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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.

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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?

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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...

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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.

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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

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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...

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Guest nanofrogfish_spf

Good find angelp. Also, about a month ago they "announced the appointment of Powermode as an authorised reseller for the South African market." Seems like they are making some good progress in South Africa.

http://www.esi-africa.com/node/15558

Another news item (on SPVI) concerning the ZEP Solar and SolarCity agreement;

"Zep Solar said it would produce and supply mounting hardware for Zep compatible modules, which includes tier 1 module manufacturers such as Sharp, Yingli Green, Canadian Solar and Trina Solar."

Finally, PricewaterhouseCoopers latest annual PV Sustainable Growth Index, has CSIQ moving up 9 spots from #15 to #6 on the list. FSLR moved up to #1 from #2. TSL moved down to #2 from #1 (expect a big drop in next year's report). LDK fell from #3 to #17.

http://www.pwc.com/en_US/us/technology/assets/pwc-pv-sustainable-growth-index.pdf

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That's very good news for c-Si and CSIQ. Too much talk about ELPS and too little production so far.

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Guest nanofrogfish_spf

Looks like SkyPower has completely re-done their website. Wasn't much to it before, with little real information. But this new site is greatly expanded and well set-up IMO.

Some comments from the new site;

The new joint venture is called CSSKY..."In June 2012, SkyPower entered into a 50:50 joint venture agreement with Canadian Solar Inc. (CSI) called CSSKY."

Also, on majority Owner CIM Group; "CIM Group manages over $9.5 billion in assets"

But most interesting was, under the About Us tab;

"Skypower has over 250 megawatts (MW) of awarded power purchase contracts including 67 MW of installed capacity operating today. These projects have produced over 100 million kilowatt hours of clean electricity to date. Our pipeline includes more than 8,400 MW at various stages of development worldwide. With offices in over 24 countries across the globe, SkyPower helps local markets meet their increasing needs for new investment in cleaner energy solutions."

and under Projects;

"6,800 MW in applications— One of the largest development pipelines of solar projects in North America"

So, they now have offices in over 24 countries globally (was 22 in Sept.)...interesting that they chose "in over"...must not want to be continually updating the site because they're expanding so quickly???

And 6.8 GW in applications (over 2 GW in development stage) in North America, with 8.4 GW worldwide, means they have about 1.6 GW outside of North America. Not too bad considering they just started the joint-venture with CSIQ about 6-months ago.

The more I look at this relationship they've forged with Skypower, the more I like it. They're both going to go a lot farther than they could have done by themselves...even taking into acount the 50:50 split...IMO). I think the long-term significance of this joint venture when announced totally flew under the radar screen and has been almost completely ignored to date by analysts and shorter-term investors (since no real impact to the bottom line would be expected until 2014 at the earliest). But for long-term (multi-year) investors like me, watching Skypower's exploding growth has me very excited about CSIQ's future prospects for many years down the road.

(Just a thought not backed up by a single fact...wouldn't it make sense at some point for the CIM group to just buy-out CSI, and just become one huge global force in the solar development industry?...it will probably never be cheaper than now to buy up a company like CSI). To be clear though, I personally would prefer a long multi-year run up on company valuation (then the buyout... ^^ ), rather than a quick short-term return, unless that amount was really worth it...

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Guest nanofrogfish_spf

They've just updated their presentation again (Dec. 3rd, 2012) Some changes I noticed; - Updated Industry Rank slide-4...moved up to #3 from #4 (switched places with TSL). - Moved Canada "circle" over to where it belonged on the annual solar yield scale (on Retail Grid Parity slide-7) - Added U.S. pipeline map, slide-23 But the 2 most interesting changes; - slide-15 Cost Roadmap...lowered Q4 poly/wafer cost to 22c from 25c...lowering total cost to 57c from previous 60c. - slide-17...revised cell efficiency roadmap. Now has hetero-junction target for 2013 at 23%, up from 21.5% (they must be onto something...the efficiency line now takes a noticeable turn upward). Overall, one of the best, most informative investor presentations in the industry in my opinion.

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Guest nanofrogfish_spf

and under Projects;

"6,800 MW in applications— One of the largest development pipelines of solar projects in North America"

So, they now have offices in over 24 countries globally (was 22 in Sept.)...interesting that they chose "in over"...must not want to be continually updating the site because they're expanding so quickly???

And 6.8 GW in applications (over 2 GW in development stage) in North America, with 8.4 GW worldwide, means they have about 1.6 GW outside of North America. Not too bad considering they just started the joint-venture with CSIQ about 6-months ago.

Sorry to quote myself, but I think someone from Skypower read my post and realized they messed up on the "6,800 MW" part under Projects...it's been changed to 8,400MW. So never-mind on my conclusion that they have 1.6 GW outside NA. But one still says NA, while the other says global. Maybe someone from Skypower can update to clarify which one's right, and how much they have outside NA.

Also, didn't notice this before, but if you click on the Contact tab (and not on Careers below it), they have a real nice map of their global offices, and which ones are CS-SKY ones. Looks like they have 12 in the joint venture, primarily in South America and Africa...nice...

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Guest nanofrogfish_spf

There's a good article IMO in RE World that covers the general state of the industry today from manufacturing to downstream and leasing and financing. In the article, it quotes a recent research report from GTM that has CSIQ as 1 of the 4 that are "highly likely to become industry leaders";

"Of the 49 firms that the report charts, GTM predicts that only Canadian Solar, Trina Solar, Yingli and Sunpower are highly likely to become industry leaders. It rates First Solar, Hyundai Heavy Industries, Talesun, Rensola, JA Solar, Suntech and Jinko solar as possibly becoming market leaders but states it’s unclear at this time."

A couple other good quotes from the article;

"“If you are in downstream you are healthy. If you’re manufacturing, you’re not healthy,” Prabhu put it simply."

"Lahey said this is a huge milestone for solar, one that “few technologies in the cleantech world have achieved.” U.S banks are increasingly putting up large amounts of money to fund solar leasing programs. “With solar approaching grid parity in several large markets, these mature companies are starting to view the industry as less risky,” said Lahey."

"Recurrent Energy’s Arno Harris acknowledges that this is a “stressful” time in the solar industry. “It’s difficult on individual companies and stressful on people who work in the industry," he said. But he points out that these are the type of growing pains that the industry must experience in order to get stronger.""

On that last point, being an investor I concur with the stress part...

http://www.renewableenergyworld.com/rea/news/article/2012/12/strategic-investing-in-the-solar-industry-who-is-buying-whom-and-why

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