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Canadian Solar (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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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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Guest nanofrogfish_spf

Just saw this news announcement...looks like LDK got awarded about $40M ($30M plus their $10M deposit) from CSIQ for breaking wafer contracts in 2007/2008. The 2007 contract expired in 2010, but the 2008 contract was for 10-yrs, at 80MW/year. So the question I have is, is this the final settlement amount, or is CSIQ still obligated to buy 80MW/year of wafers from LDK for the next 6-years (not sure how the pricing agreement was structured back then, but it's obviously way above current market prices)?

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Guest nanofrogfish_spf

I think this was a take or pay contract, so this arbitration award should be the end of it...

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This is the final arbitration reward. They will get $30M from CSI. I am sure CSI will pay it, as if the gov't decided this they will not want to play a hard ball with them. However CSI will never pay the Solar Wafer for their contract. It could be a lot of pressure on CSI, but by rights they should never see SolarWorld to collect anything. This amount was a lot more.

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Guest PV-Opt

The contract with Deutsche Solar is small, only EUR180 about $236. Below is I what found from online. I think their contingency estimate is about right. Nano, Odyd, your thoughts? Canadian Solar and SolarWorld Group Enter into 180 M Euro Supply Contract January 25, 2007 | Post Your Comment Jiangsu, China [RenewableEnergyAccess.com] Canadian Solar Inc. (CSI) signed a long term supply contract with Deutsche Solar, the wafer manufacturing subsidiary of Solar World Group of Germany in which Deutsche Solar will supply to CSI approximately 180 million Euro [uS$ 233.4 million] worth of Solsix-Multi 6-inch wafers over a 12-year period. Initial deliveries will start immediately, with full annual quantity deliveries to commence in January of 2009. CSI and Solar World Group have worked together for the past two years, during which time CSI has been providing recycled silicon feedstock for Deutsche Solar to turn into wafer on toll manufacturing basis.

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Guest nanofrogfish_spf

The contract dispute with LDK and Solarworld are discussed in their form 20-F (available on their website dated 4/27/12), on pages F41 thru F43. In regards to LDK, in arbitration LDK wanted about $63 Mil. plus the $10 Mil. deposit. They got about $30 Mil. plus the deposit. CSIQ made provisions for the $10 Mil., but not the rest (their comment; "The Company believes the allegations are without merit and that the potential for additional loss is remote and, accordingly, has not recorded an additional liability associated with such lawsuit."). So if they decide to pay it and not take this any further, they would take the hit in Q4 or Q1. In regards to Solarworld, it looks like Solarworld is the one who terminated the contract in December 2011. Little more complicated on the loss contingencies (better just to read their verbiage). There is no mention of any court proceedings, only that; "In the notice, Deutsche Solar AG also reserved its right to claim damage of Euro148.6 million in court". I could not find anything on court proceedings since the release of this 20-F.

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Guest PV-Opt

Thanks Nano! The only thing I found similar to CSIQ and Deutche Solar is CSUN's suit against REC and by mediation CSUN ended up paying a small amount that was not disclosed. The court is in Norway though. In German court, not sure how it will go. Looks like CIETAC's arbitration is end game and CSI is obligated to pay. I read that from CIETAC's web site about the enforcement of its arbitration.

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we had an article published describing some details about this litigation http://solarpvinvestor.com/spvi-news/191-rec-first-quarter-results-canadian-solar-facing-deutsche-solars-contract-cancellation- I think that depending on the political climate, CSIQ could lose, but chances to recover damages by Deutsche (or amounts not yet paid by CSIQ to Deutsche Solar) are slim. LDK will be paid out. Survival of LDK is a challenge which is supported by government, so CSIQ is bound to assist. On the other hand SolarWorld is the single reason of tariffs in the US and European investigation. I am certain there will be no penny more spent on this by any Chinese entity. I would imagine there is a heavy solicitation to isolate and destroy SW on global arena. SW may have gathered anti-Chinese proponents under its name, so it is a matter of which camp is larger. China's 40GW is offering huge opportunity to foreigners and SW offers nothing more than Chinese already have. So the expectation is that SW will be gone sooner than later.

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“Our decision a few years ago to go more into development has put us in a position where we have a much better chance of swinging back to profitability in the near term than a lot of our competition,” Potter said in an interview Dec. 10 in Bloomberg’s Toronto bureau. :P :P link: http://www.bloomberg.com/news/2012-12-13/canadian-solar-sees-growth-from-selling-power.html?cmpid=yhoo

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Guest nanofrogfish_spf

The usual signs of short desperation are starting to reappear...this helped fuel the big rally early in 2012...very bullish IMO.

Gordon Johnson on CNBC with sweat on his face and panic in his voice on how the CEO is a big fat liar...again...so sell-sell-sell:___CHECK

Bloomberg article with short analyst commentary (Raymond James) with pending doom & gloom and half-truths with the following advice to investors;

“The measures so far are counterproductive, they should let bad companies go bankrupt and let capacity rationalization happen,” Alex Morris, an energy analyst at Raymond James, said by phone yesterday from Houston. “Investors should take the opportunity of this junk rally to actively short these solar stocks.”___CHECK (Are you kidding me, the old "it's just a JUNK RALLY" rant...they need to get a new playbook...)

btw Alex, part of the measures IS to let companies go bankrupt and consolidate, and prevent local governments from bailing them out...Another Half-Truth!___CHECK

Just got to love climbing the wall of worry...

If things look like they are turning around for the industry in general, the smart fund managers will start taking/increasing their exposure because of the huge upside of the industry. And they will be much more selective about where those dollars will go. There's a new order now amongst the global solar companies now, and CSIQ is near the top by every reasonable measure. But their valuation is amongst the lowest, especially considering their visible revenue streams. Eventually this imbalance will correct itself...hopefully this time on the way up instead of on the way down...

2013 is going to be a very good year for solars IMHO...it’s setting up very nicely...

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Hi Nano, As always you are right. You can see in his face that Gordon is desperate. Also the beginning is so bad for him as they let the people see how wrong his advise was. Following this interview you can feel that cnbc is probably paid to ask the questions that have been giving to them by Gordon. Regarding CSIQ it is nice to see that the computers get more and more into trouble to manipulate the stock. Every day for the last year you can see how constantly the upswing is frustrated by selling all the time around 100 pieces at the bid side. Because of the limited free float in the amount of shares this is a very usefull tool for the shorts with CSIQ. Can't wait to see the same situation but then the other way round.

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Guest PV-Opt

The volume is picking up pretty nicely today on a down day. Not sure what that means. Maybe it needs to solidify a firm floor before the next take-off. I am crossing my fingers that solar will go past the current turmoil quite soon.

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Guest nanofrogfish_spf

“As always you are right.”

Thanks LG, but anyone who’s read my posts for any length of time knows that is far from being accurate...

These guys do really irk me though; it was my original motivation for starting to post over a year ago on Yahoo. It’s one

thing to make their bearish case, but some (albeit a small percentage) use underhanded tactics and deception to try and stop the progress of clean energy and/or to make money for themselves/clients at the expense of the small-time investor; ego, greed and political agendas at work. I guess I’ve made it my personal vendetta to call out these deceptions when I see them...

You see it every time solar stocks try to make a run...you don’t hear anything from these guys for months, then when solars start heading higher the usual suspects show up (Gordon, Jenny, Raymond James analyst, Bachman, Pichel, etc.) with their “free” advice for us small investors of the pending doom and gloom for every company in the entire industry...so sell...sell...sell! They usually fail to mention the pressure they’re under when their shorts are taking a bath, or just trying to explain to them why they’re missing out on a huge run, resulting in these un-professional tactics such as calling all solar companies “Junk”.

So I just try to point out that at least some of these solar companies are not junk, and actually have a very bright future, while these previously mentioned analyst are typically just putting out junk commentary and advice IMHO.

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Guest nanofrogfish_spf

Nice news this morning on the purchase agreement for two projects from SunEdison Power Canada totaling about 24MW DC, and with the ability to add 2 more totaling 22.5MW DC, and an option to buy a fifth. It was also stated that this brings a settlement to litigation proceedings started last Oct (no idea who was suing who for what). So the total could be about 58MW DC, and the best part is that these are all approved under the original FIT version 1.0 program, so they should be able to sell them at well over $4/W DC. That should bring total revenue to about $250 Million or more. The purchase price of $37 Mil. sounds high if it's just for the first 2 projects. But these do sound like a lot of the development work has already been done, as they're ready for construction so that may be part of it. Not sure what or if the litigation settlement had to do with this number. If it's for at least the first 4 projects totaling 46.5 MW, then not a bad deal at all. I'll try and update my project spreadsheet this weekend...I'm going to assume that they will use percentage of completion on these, so revenue will be realized throughout 2013 and into the middle of 2014. I'm sure we'll hear more details during the next CC.

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Guest spiritcraft

I saw that but couldn't quite figure it out... whose module are being used? Are they buying a plant for cash flow or will their product be used as well?

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Guest nanofrogfish_spf

CSIQ will be constructing and commissioning these solar farms, so all modules would be CSIQ's, and would need to come from their Canadian factory to meet local content requirements. They will then sell them to the highest bidder...unless they decide to keep one. There is high demand for these solar farms so they should get a pretty good price, since their returns are government backed with the FIT's...similar to a bond but with much higher returns...

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Guest spiritcraft

Thanks, that is what I suspected. So what are they buying? The land and approved project with the FIT in place? Sorry for the dumb questions....

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Mainly the FIT I guess. It's Ontario v1.0 FIT. You can't get those levels anymore. Helps reaching revenue target for systems business. Nice to see them continue building their pipeline. I'm not sure downstream is the long-term lucrative segment, but if you have an opportunistic perspective on it it can help your business. I think these small ontario and US projects csiq is doing are safer from profitability point than then 200mw Gansu project LDK and JKS are doing.

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Hey PV, Have you ever considered looking into the Solarzoom reports? I find a lot of investors looking into CSIQ, I am curious if they would find this data interesting on the company among others. Although we are the platform for Solarzoom and SPVI gets commission from it I find it very useful, and encouraging in some cases, no so much in others. You would probably like what you see, in this case.

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