Canadian Solar Reports First Quarter 2022 Results

PVTIME – On May 24, Canadian Solar Inc. (“Canadian Solar” or the “Company”) (NASDAQ: CSIQ) announced financial results for the first quarter ended March 31, 2022.


  • Solar module shipments of 3.63 GW, in line with guidance of 3.6 GW to 3.8 GW.
  • 15% increase in revenue year-over-year (“yoy”) to $1.25 billion, in line with guidance of $1.25 billion to $1.35 billion.
  • 14.5% gross margin, in line with guidance of 14.5% to 15.5%.
  • Net income attributable to Canadian Solar of $9 million, or $0.14 per diluted share.
  • Global Energy solar project pipeline of 24 GWp and storage pipeline of over 27 GWh, as of March 2022.
  • Carve-out IPO of CSI Solar Co., Ltd. (“CSI Solar” or the “CSI Solar subsidiary”) remains on track.
  • Accelerating upstream capacity expansion plan.

Dr. Shawn Qu, Chairman and CEO, commented, “First quarter 2022 shipments, revenue and gross margin all came in as expected, despite the challenging operating environment. Our teams continued to focus on executing the strategy of building our long-term competitive position across solar module, battery storage, system solutions and global project development businesses. Today we are announcing an acceleration of our upstream capacity expansion plan for 2022 with the latest state-of-the-art technologies. This will meaningfully increase the vertical integration level of our manufacturing capacity and solidify our global leadership position. In this process, we expect to gain better control of cost, technology and product quality. At the same time, we are growing our battery storage business, winning contracts in new markets and segments, while continuing our development of proprietary battery storage technologies for both utility-scale and residential solutions.

“Regarding the carve-out IPO of CSI Solar, despite the slowdown caused by severe COVID-related lockdowns in China, its registration process with the China Securities Regulatory Commission remains on track.”

Yan Zhuang, President of Canadian Solar’s CSI Solar subsidiary, said, “While the first quarter was challenging, as we expected, with polysilicon price cost inflation coming back, we took mitigating measures by continuing to raise prices and optimize capacity utilization, improve product efficiencies, and further reduce our processing costs. Despite the headwinds, we grew CSI Solar revenue by 74% and gross profit by 161% yoy. While it is still early into 2022, we are encouraged to see logistic costs starting to come down, albeit from a high level, and currencies starting to move in our favor after two years of headwinds. Longer term, with demand for renewable energy expected to remain as strong as ever, we will continue to build on our strong brand and track record, gain market share in established markets and enter new and rapidly growing markets.”

Ismael Guerrero, Corporate VP and President of Canadian Solar’s Global Energy subsidiary, said, “In the first quarter of 2022, we delivered approximately 350 MWp of project sales in the U.S., which were mostly pre-construction projects. We also made significant progress in our development activities, signing new power purchase agreements (“PPAs”) in Brazil, Italy and the U.S. In the current inflationary environment, underlying demand for clean energy assets continues to accelerate. Our strategy remains unchanged, that is to grow the base of recurring revenue from retained assets and contracted services, which is why we have raised our long-term operational O&M (operations and maintenance) project targets, while proactively managing policy and currency risks across our key markets.”

Dr. Huifeng Chang, Senior VP and CFO, added, “In the first quarter, we achieved $1.25 billion in revenue and a 14.5% gross margin, both within our guidance range. We strategically increased our inventories of raw materials as well as finished goods, as we support customer demand and work to mitigate the impact of inflation. Net cash provided by operating activities in the first quarter of 2022 was $159 million, compared to net cash used in operating activities of $235 million in the fourth quarter of 2021. We ended the quarter with a total cash position of $1.7 billion, which gives us continued financial flexibility to fund long-term growth opportunities, including accelerating our upstream capacity expansion.”

First Quarter 2022 Results

Total module shipments recognized as revenues in the first quarter of 2022 were 3.63 GW, up 42% yoy. Of the total, 156 MW were shipped to the Company’s own utility-scale solar power projects.

Net revenues in the first quarter of 2022 were $1.25 billion, up 15% yoy and down 18% quarter-over-quarter (“qoq”). The yoy increase was mainly driven by higher solar shipment volumes and ASP, and significant growth in the Company’s battery storage solutions business, partially offset by lower project sales. The sequential decrease was mainly driven by lower project sales.

Gross profit in the first quarter of 2022 was $181 million, down 7% yoy and 40% qoq. Gross margin in the first quarter of 2022 was 14.5%, within prior guidance, and compared to 19.7% in the fourth quarter of 2021. The sequential gross margin decline was mainly driven by higher raw material costs and the absence of U.S. anti-dumping and countervailing duty true up benefit in the current quarter relative to the prior quarter, which was partially offset by higher modules pricing and higher margin project sales.

Total operating expenses in the first quarter of 2022 were $165 million compared to $234 million in the fourth quarter of 2021 and $151 million in the first quarter of 2021. The sequential decrease was mainly driven by lower shipping and handling expenses and an increase in other operating income.

Non-cash depreciation and amortization charges in the first quarter of 2022 were $66 million, compared to $76 million in the fourth quarter of 2021 and $62 million in the first quarter of 2021.

Net foreign exchange gain in the first quarter of 2022 was $3 million, compared to a net gain of $1 million in the fourth quarter of 2021 and a net loss of $7 million in the first quarter of 2021.

Income tax benefit in the first quarter of 2022 was $5 million, compared to a $27 million income tax expense in the fourth quarter of 2021 and a $14 million income tax expense in the first quarter of 2021. The benefit was a result of a lower income before income tax and a Canadian tax refund.

Net income attributable to Canadian Solar in the first quarter of 2022 was $9 million, or $0.14 per diluted share, compared to net income of $26 million, or $0.39 per diluted share, in the fourth quarter of 2021, and net income of $23 million, or $0.36 per diluted share, in the first quarter of 2021.

For the three months ended March 31, 2022, earnings per share – diluted (“Diluted EPS”) of $0.14 was calculated from total earnings of $9 million divided by 64.7 million diluted shares. For the three months ended December 31, 2021, Diluted EPS of $0.39 was calculated from total earnings of $27 million, including 2.5% coupon of $1.3 million, divided by 70.5 million diluted shares, including 6.3 million shares issuable upon the conversion of the convertible notes. For the three months ended March 31, 2021, Diluted EPS of $0.36 was calculated from total earnings of $23 million, including 2.5% coupon of $1.3 million, divided by 67.5 million diluted shares, including 6.3 million shares issuable upon the conversion of the convertible notes.

Net cash provided by operating activities in the first quarter of 2022 was $159 million, compared to net cash used in operating activities of $235 million in the fourth quarter of 2021. The operating cash inflow was mainly driven by changes in working capital, specifically, an increase in accounts payable and short-term notes payable, partially offset by an increase in inventories.

Total debt was $2.7 billion as of March 31, 2022, compared to $2.5 billion as of December 31, 2021. The increase was mainly driven by an increase in project financing and working capital facilities. Non-recourse debt used to finance solar power projects increased to $550 million as of March 31, 2022, from $515 million as of December 31, 2021.

Corporate Structure

The Company has two business segments: CSI Solar and Global Energy. From November 2021, the Company completed the transfer of the China Energy assets from CSI Solar to the Global Energy segment to avoid any potential competition between the Company and its CSI Solar subsidiary, as part of the CSI Solar carve-out listing process.

As such, the Company’s business segments are as follows:

The Global Energy segment includes all of the Company’s global project development activities for both solar and battery storage project development. The Global Energy segment develops both stand-alone solar and stand-alone battery storage projects, as well as hybrid solar plus storage projects. Its monetization strategies vary between develop-to-sell, build-to-sell, and build-to-own, depending on business strategies and market conditions, with the goal of maximizing returns, accelerating cash turn, and minimizing capital risk.

The CSI Solar segment consists of solar module manufacturing and total system solutions, including inverters, solar system kits and EPC (engineering, procurement and construction) services. The CSI Solar segment also includes the Company’s battery storage integration business, delivering bankable, end-to-end, turnkey battery storage solutions for utility scale, commercial and industrial, and residential applications. These storage systems solutions are complemented with long-term service agreements, including future battery capacity augmentation services.

The distinction of the two battery storage businesses is that the former, Global Energy, is in the project development business, including sourcing land, interconnection, structuring PPAs and other permits and requirements for battery storage projects, whereas the latter, CSI Solar, is in thesystem integration business, delivering turnkey battery storage technology solutions.

Global Energy Segment

Canadian Solar has one of the world’s largest and most geographically diversified utility-scale solar and energy storage project development platforms, with a strong track record of originating, developing, financing, and building over 6.6 GWp of solar power plants across six continents. The Company has built a leadership position in solar project development with 24 GWp total pipeline, as well as in energy storage project development with over 27 GWh of aggregate pipeline.

The continued pipeline expansion and strong project development track record will support Global Energy’s growth in three key areas:

  1. Project sales: The Company plans to grow its volume of project sales by a compound annual growth rate of approximately 50% to 2026, while holding and accumulating assets through investment vehicles (see below) in order to better capture asset value.
  2. Investment vehicles: The Company is optimizing its project monetization strategy by establishing local investment vehicles that will help maximize the value of its project assets. The Company also intends to retain minority ownership in these vehicles. By 2026, the Company plans to reach 1.3 GW of combined net ownership in solar power projects through these vehicles. This approach will help the Company build and grow a stable base of long-term cash flows from contracted electricity. The Company plans to recycle a large portion of the capital into developing new solar projects for growth. Meanwhile, Canadian Solar expects to capture additional operational value throughout the partial ownership period, including long-term cash flows from power sales, O&M, asset management and other services (see point 3). The Company currently owns a 15% stake in the Canadian Solar Infrastructure Fund (“CSIF”, TSE: 9284), the largest Japanese infrastructure fund listed on the Tokyo Stock Exchange, and has also established the CSFS Fund I, a closed-ended alternative investment fund of a similar nature in Italy. Through launching these localized vehicles, Canadian Solar is building up its expertise in designing investment vehicles in local markets that will help maximize the value of its project assets.
  3. Services: Canadian Solar currently manages over 2 GW of operational projects under long-term O&M agreements, and an additional 2 GW of contracted projects that will be operated and maintained by the Company once they are placed in operation. The Company’s target is to reach 20 GW of projects under O&M agreements by 2026.

Management targets to achieve the following over the next few years:

Global Energy Targets2021A2022E2023E2024E2025E2026E
Annual Project Sales, GWp2.12.1-2.62.8-3.33.5-4.04.0-4.54.3-4.8
Operational O&M Projects, GWp2.14.57.5111520
Net Cumulative Projects Retained, MWp*2923706301,0001,1001,300
Gross Cumulative Projects Retained, MWp*7481,5002,5803,5004,0005,000

*Net projects retained represents CSIQ’s net partial ownership of solar projects; the gross number represents the aggregate gross size of projects, including the share which is not owned by CSIQ.

Solar Project Pipeline

As of March 31, 2022, the Company’s total project pipeline was 23.8 GWp, including 1.1 GWp under construction, 4.2 GWp of backlog, and 18.5 GWp of earlier stage pipeline.

Backlog projects are late-stage projects that have passed their Risk Cliff Date and are expected to be built in the next 1-4 years. A project’s Risk Cliff Date is the date on which the project passes the last high-risk development stage and varies depending on the country where it is located. This is usually after the projects have received all the required environmental and regulatory approvals, and entered into interconnection agreements, feed-in tariff (“FIT”) arrangements and PPAs. Over 90% of projects in backlog are contracted (i.e., have secured a PPA or FIT), and the remaining are reasonably assured of securing PPAs.

Pipeline projects are early- to mid-stage project opportunities currently under development that are yet to be de-risked.

The following table presents the Company’s total project pipeline.

The Company has 336 MWp of FIT projects in Japan. The table below sets forth the expected COD schedule of the Company’s project backlog in development and construction in Japan, as of March 31, 2022:

Expected COD Schedule – MWp 

202220232024 and

Battery Storage Project Pipeline

The Global Energy segment has been actively developing utility-scale solar plus energy storage projects, as well as stand-alone battery storage projects. Since the first quarter of 2021, the Company has been co-hosting energy storage facilities with solar power plants on the same piece of land for nearly all projects under development. By using one interconnection point per project, the Company expects to significantly enhance the efficiency of its development and the value of its assets under development.

In addition, Canadian Solar has already signed several storage tolling agreements with a variety of power purchasers, including community choice aggregators, investor-owned utilities, universities, and public utility districts. The Company has also signed development services agreements to retrofit operational solar projects with battery storage, many of which were previously developed by the Company.

The table below sets forth Global Energy’s storage project development backlog and pipeline.

Solar Power Plants and Battery Storage Projects in Operation

As of March 31, 2022, the Company’s solar power plants in operation totaled 800 MWp, with a combined estimated net resale value of approximately $580 million to Canadian Solar. The estimated resale value is based on selling prices that Canadian Solar is currently negotiating or comparable asset sales.

*All numbers are gross MWp, including 196 MWp in Latin America and 2 MWp in Asia Pacific ex. Japan and China already sold to third parties.

Operating Results

The following table presents unaudited select results of operations data of the Global Energy segment for the periods indicated.

CSI Solar Segment

CSI Solar’s 2022 capacity expansion targets are detailed below.

Manufacturing Capacity, GW*

Dec. 2021
Jun. 2022
Dec. 2022

*Nameplate annualized capacities at said point in time. Capacity expansion plans are subject to change without notice based on market conditions and capital allocation plans.

Operating Results 

The following table presents unaudited select results of operations data of the CSI Solar segment for the periods indicated.

The table below provides the geographic distribution of the net revenues of CSI Solar:

*Excludes sales from CSI Solar to Global Energy.

CSI Solar shipped 3.6 GW of modules to more than 70 countries in the first quarter of 2022. The top five markets ranked by shipments were China, Brazil, India, the U.S. and Germany.

Battery Storage Solutions

Within CSI Solar, the battery storage solutions team provides customers with competitive turnkey, integrated battery storage solutions, including bankable and fully wrapped capacity and performance guarantees. These guarantees are complemented with long-term service agreements, which include future battery capacity augmentation services and bring in long-term, stable income.

The table below sets forth CSI Solar’s battery storage system integration’s project pipeline as of March 31, 2022.

LTSA (Long
Term Service
Contracted/In ConstructionForecastPipelineTotal
Storage (MWh)8611,5723404,3997,172

LTSA projects are operational battery storage projects delivered by CSI Solar that are under multi-year long-term service agreements and generate recurring earnings. Contracted/in construction projects are expected to be delivered within the next 12 to 18 months. Forecast projects include those that have more than 75% probability of being contracted within the next 12 months, and the remaining pipeline includes projects that have been identified but have a below 75% probability of being contracted.

Business Outlook

The Company’s business outlook is based on management’s current views and estimates given factors such as existing market conditions, order book, production capacity, input material prices, foreign exchange fluctuations, anticipated timing of project sales, and the global economic environment. This outlook is subject to uncertainty with respect to, among other things, customer demand, project construction and sale schedules, product sales prices and costs, the global impact of the ongoing COVID-19 pandemic, and geopolitical conflicts. Management’s views and estimates are subject to change without notice.

For the second quarter of 2022, the Company expects total module shipments to be in the range of 4.9 GW to 5.1 GW, including approximately 150 MW to the Company’s own projects. Going forward, shipment guidance will be based on total shipments recognized as revenues by CSI Solar, which includes both third party and Global Energy shipments. Total revenues are expected to be in the range of $2.2 billion to $2.3 billion. Gross margin is expected to be between 14.5% and 15.5%.

Company guidance for full year 2022 remains unchanged with the following ranges: total module shipments of 20 GW to 22 GW, battery storage shipments of 1.8 GWh to 1.9 GWh, total project sales of 2.1 GW to 2.6 GW and total revenue of $7.0 billion to $7.5 billion.

Dr. Shawn Qu, Chairman and CEO, commented, “We expect to drive higher revenue in the second quarter led by higher volumes in solar module and battery storage shipments, and project sales. Additionally, we expect the net effect from currency fluctuations to be positive on our overall profitability, while partially offset by higher material costs. We continue to leverage our global leadership position in sustainable growth areas, including the greenfield battery storage market, as we focus on profitable growth and building shareholder value.”

Recent Developments

On May 17, 2022, Canadian Solar announced its wholly owned subsidiary Canadian Solar Projects K.K., together with its owned special purpose vehicles, topped the ranking of cumulative capacity of solar projects awarded under Japan’s FIT auction program since its launch in 2017, according to the latest research published by Clean Tech Lab, Nikkei BP Intelligence Group.

On May 10, 2022, Canadian Solar announced that DNV recognized Canadian Solar’s 210 mm cell based Hiku7 and BiHiKu7 modules, with power output of up to 670W, are highly reliable, of top quality and with 3% lower LCOE (levelized cost of energy) after DNV conducted a comprehensive review of the said modules, assessing them on production process, performance, reliability and LCOE performance. DNV is a world leading independent third-party expert in product certification, risk management and assurance.

On May 9, 2022, Canadian Solar announced it entered the utility scale energy storage market in the United Kingdom after signing agreements to provide integrated energy storage systems and EPC services for four battery storage projects of more than 100 MWh. Pulse Clean Energy is the owner of the four projects.

On May 3, 2022, Canadian Solar announced its wholly owned subsidiary Recurrent Energy received approval from the Louisiana Public Service Commission for a PPA for the 132 MWdc / 98 MWac Bayou Galion solar project in Louisiana. 1803 Electric Cooperative is energy off-taker of the project.

On April 7, 2022, Canadian Solar announced its wholly owned subsidiary Recurrent Energy signed an agreement to sell the Gaskell West 2 and 3 project of 105 MWac solar plus 80 MWh energy storage to Matrix Renewables. This solar plus storage project is expected to reach commercial operation in late 2022. Canadian Solar’s majority-owned subsidiary CSI Solar will provide the turnkey battery storage solution for the 80 MWh storage part of the project.

On March 15, 2022, Canadian Solar announced it started mass production and shipments of new 54-cell format modules with 182 mm cell for residential, commercial and industrial rooftop solar systems. CS6R-MS, the new module type under the HiKu6 series, has power output of up to 420 W and module efficiency of up to 21.5%.

Conference Call InformationThe Company will hold a conference call at 8:00 a.m. U.S. Eastern Daylight Time on Tuesday, May 24, 2022 (8:00 p.m., Tuesday, May 24, 2022 in Hong Kong) to discuss its first quarter 2022 results and business outlook. The dial-in phone number for the live audio call is +1-833-239-5565 (toll-free from the U.S.), +852-3018-6771 (local dial-in from Hong Kong), 400-8205-286 (local dial-in from Mainland China) or +1-332-208-9468 / +65-6713-5590 from international locations. The passcode for the call is 2656116. A live webcast of the conference call will also be available on the investor relations section of Canadian Solar’s website at

A replay of the call will be available 2 hours after the conclusion of the call until 9:00 a.m. U.S. Eastern Daylight Time on Wednesday, June 1, 2022 (9:00 p.m., June 1, 2022 in Hong Kong) and can be accessed by dialing +1-855-452-5696 (toll-free from the U.S.), +852-3051-2780 (local dial-in from Hong Kong), 400-8209-035 (toll-free from Mainland China) or +1-646-254-3697 from international locations. The passcode for the replay is 2656116. A webcast replay will also be available on the investor relations section of Canadian Solar’s website at