Canadian Solar Reports Third Quarter 2022 Results

PVTIME Canadian Solar Inc. (“Canadian Solar” or the “Company”) (NASDAQ: CSIQ) today announced financial results for the third quarter ended September 30, 2022, with 57% year-over-year (“yoy”) revenue growth and net income of $1.12 per diluted share as the Company continues to prioritize profitable growth.


  • 18.8% gross margin exceeds the guidance range of 15.0% to 16.5%.
  • 57% increase in revenue to $1.93 billion, compared to $1.23 billion in 3Q 2021.
  • 123% increase in net income attributable to Canadian Solar to $1.12 per diluted share compared to $0.52 per diluted share in 3Q 2021.
  • 62% increase in solar module shipments to 6.0 GW, compared to 3.7 GW in 3Q 2021.
  • Global Energy battery storage project development pipeline expands to 40 GWh and solar project development pipeline at 25 GWp, as of September 30, 2022.
  • Company expects full year 2023 module shipments to be in the range of 30 GW to 35 GW, representing 56% yoy growth at the mid-point of the range.
  • Carve-out IPO of CSI Solar Co., Ltd. (“CSI Solar” or the “CSI Solar subsidiary”) back on track awaiting completion of CSRC registration.

Dr. Shawn Qu, Chairman and CEO, commented, “We achieved a 123% increase in net income on a year-over-year basis, despite the headwinds from ongoing COVID-19 shutdowns and macroeconomic challenges. We continue to execute our long-term strategy and build on our competitive position with a further expansion of our upstream capacity and increased level of vertical integration in our solar manufacturing capacity. The benefits of greater control over our supply chain and an improved cost structure will further strengthen our competitive moat, driving a differentiated value proposition for our customers through better products with lower carbon footprint. We are also actively evaluating options in the U.S. market given the recent passing of the Inflation Reduction Act and its potential positive impact as another growth catalyst. Finally, after a short procedural pause, CSI Solar’s carve-out IPO is back on track awaiting registration with the China Securities Regulatory Commission.”

Yan Zhuang, President of Canadian Solar’s CSI Solar subsidiary, said, “We achieved significant growth in both profit and volume during the third quarter, driven by strong demand, ongoing reductions in manufacturing cost, and currency benefits from a strong U.S. Dollar relative to the Renminbi. CSI Solar continues to successfully balance growth and profitability, prioritizing margins by enhancing our pricing power in higher-priced markets and delivering greater system-value to our customers. With that in mind, we officially launched two proprietary battery storage products, the SolBank for large utility scale applications and the EP Cube for residential applications, which received an overwhelmingly positive response from customers. CSI Solar’s battery storage turnkey pipeline at the end of the third quarter more than doubled to 25 GWh, with several new projects across the U.S. and Europe recently signed. Supported by strong partnerships through the battery storage supply chain, we are confident that energy storage will become an increasingly important driver of our long-term growth and value creation.”

Ismael Guerrero, Corporate VP and President of Canadian Solar’s Global Energy subsidiary, said, “The third quarter was, as anticipated, a sequentially smaller but profitable quarter for Global Energy as we monetized around 890 MWp of solar projects. The majority of projects sold were earlier-stage pre-construction projects in the U.S. and Brazil, and a small operational project in Japan, supporting a 47% gross margin during the quarter. Strategically, we are focusing more resources on developing battery storage projects, both stand-alone and hybrid, where we have an edge and can not only help our customers de-carbonize operations and electric grids, but also de-risk project portfolios, enhance overall project values and meaningfully contribute to the stability and reliability of the grid.”

Dr. Huifeng Chang, Senior VP and CFO, added, “In the third quarter, we achieved 57% revenue growth year-over-year and expanded our gross margin to 18.8%, delivering net income of $1.12 per diluted share. Our team continues to do a great job managing inventory levels to support our customers, while maintaining a healthy balance sheet to support our long-term working capital, product roadmap and capacity expansion strategy. We ended the quarter with a total cash position of $2.0 billion and remain well positioned to benefit from the acceleration in growth the industry is seeing worldwide in both solar and battery storage.”

Third Quarter 2022 Results

Total module shipments recognized as revenues in the third quarter of 2022 were 6.0 GW, up 62% yoy. Of the total, 196 MW were shipped to the Company’s own utility-scale solar power projects.

Net revenues in the third quarter of 2022 were up 57% yoy and down 16% quarter-over-quarter (“qoq”) to $1.93 billion. The sequential decline primarily reflects lower revenue from project sales and battery storage solutions and a small decline in module average selling price (“ASP”). This was partially offset by higher solar module shipment volumes. The yoy improvement was mainly driven by an increase in module shipments and ASPs.

Gross profit in the third quarter of 2022 was $363 million, up 59% yoy and down 2% qoq. Gross margin in the third quarter of 2022 was 18.8%, compared to 16.0% in the second quarter 2022, and considerably above prior guidance. The sequential gross margin increase was mainly driven by lower manufacturing costs that were also attributable to the depreciation of the Renminbi relative to the U.S. Dollar, higher margin contribution from project sales, and lower sales from battery storage solutions.

Total operating expenses in the third quarter of 2022 were $274 million compared to $255 million in the second quarter of 2022 and $176 million in the third quarter of 2021. The sequential increase was mainly driven by an impairment charge related to certain manufacturing assets and higher shipping and handling expenses.

Depreciation and amortization charges in the third quarter of 2022 were $56 million, compared to $63 million in the second quarter of 2022 and $71 million in the third quarter of 2021.

Net interest income in the third quarter of 2022 was $4 million, compared to net interest expense of $15 million in the second quarter of 2022 and net interest expense of $11 million in the third quarter of 2021. The increase in net interest income was mainly driven by a one-time interest benefit of $17 million deriving from the interest income generated by the anti-dumping and countervailing duty deposit refunds.

Net foreign exchange and derivative gain in the third quarter of 2022 was $39 million, compared to a net gain of $6 million in the second quarter of 2022 and a net loss of $14 million in the third quarter of 2021. The net foreign exchange gain was mainly driven by the strengthening of the U.S. Dollar against the Renminbi.

Net income attributable to Canadian Solar in the third quarter of 2022 was $78 million, or $1.12 per diluted share (“diluted EPS”), compared to net income of $74 million, or $1.07 per diluted share, in the second quarter of 2022, and net income of $35 million, or $0.52 per diluted share, in the third quarter of 2021.

For the three months ended September 30, 2022, diluted EPS of $1.12 was calculated to include the dilution effect of the outstanding convertible notes. Diluted EPS of $1.12 was calculated from total earnings of $80 million, adding back the 2.5% coupon of $1.3 million, divided by 71.4 million diluted shares, including 6.3 million shares issuable upon the conversion of the convertible notes. For the three months ended June 30, 2022, diluted EPS of $1.07 was calculated from total earnings of $76 million, adjusted for the effects of the convertible notes. For the three months ended September 30, 2021, diluted EPS of $0.52 was calculated from total earnings of $37 million, adjusted for the effects of the convertible notes.

Net cash flow provided by operating activities in the third quarter of 2022 was $68 million, compared to $293 million in the second quarter of 2022. The decrease in operating cash inflow was mainly driven by changes in working capital.

Total debt was $2.7 billion as of September 30 and June 30, 2022. Non-recourse debt used to finance solar power projects increased to $311 million as of September 30, 2022, from $264 million as of June 30, 2022.

Corporate Structure

The Company has two business segments: Global Energy and CSI Solar, which operate as follows:

The Global Energy segment carries out the Company’s global project development activities for both solar and battery storage project development, which include sourcing land, interconnection agreements, structuring power purchase agreements (PPAs) and other permits and requirements. 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 system 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.

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 7.3 GWp of solar power plants across six continents. The Company has built a leadership position in solar project development with 25 GWp total pipeline, as well as in energy storage project development with 40 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, the Company 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 its expertise in designing investment vehicles in local markets that will help maximize the value of its project assets.

3.      Services: The Company currently manages over 3.6 GW of operational projects under long-term O&M agreements, and an additional 2.2 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:

*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.

Project Pipeline – Solar

As of September 30, 2022, the Company’s total project pipeline was 25.0 GWp, including 1.0 GWp under construction, 5.2 GWp of backlog, and 18.8 GWp of projects in advanced and early-stage pipelines. We have updated our project pipeline classification as follows:

  • Backlog projects are late-stage projects that have passed their Risk Cliff Date and are expected to start construction 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.
  • Advanced pipeline projects are mid-stage projects that have secured or have more than 90% certainty of securing an interconnection agreement.
  • Early-stage pipeline projects are early-stage projects controlled by Canadian Solar that are in the process of securing interconnection.
  • The following table presents Global Energy’s total solar project development pipeline.

Project Pipeline – Battery Storage

In addition to developing utility-scale solar power projects, the Global Energy segment has also been developing hybrid solar plus energy storage projects, as well as stand-alone battery storage projects. The Company co-hosts energy storage facilities with solar power plants on the same piece of land for nearly all projects under development. By using a single interconnection point per project, the Company expects to significantly enhance the efficiency of its development and the value of its assets under development.

Canadian Solar’s storage development business model also includes signing storage tolling agreements with a variety of power purchasers, including community choice aggregators, investor-owned utilities, universities, and public utility districts. In addition, the Company has 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 total battery storage project development pipeline.

Projects in Operation – Solar and Battery Storage Power Plants

As of September 30, 2022, the Company’s solar power plants in operation totaled 508 MWp, with a combined estimated net resale value of approximately $575 million to Canadian Solar. The estimated resale value is based on selling prices that Canadian Solar is currently negotiating or comparable asset sales.

Operating Results

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

CSI Solar Segment

Solar Modules

CSI Solar shipped 6.0 GW of solar modules to more than 70 countries in the third quarter of 2022. The top five markets ranked by shipments were China, the U.S., Brazil, Spain and Germany.

CSI Solar’s 2022 and 2023 solar capacity expansion targets are set forth below.

Battery Storage Solutions

Within CSI Solar, the battery storage solutions team, namely CSI Energy Storage, provides customers with competitive turnkey, integrated, utility-scale 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 Energy Storage’s project pipeline as of September 30, 2022, including projects contracted under long term service agreement.  

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 received exclusivity agreements or have been shortlisted, but still have a below 75% probability of being contracted.

In September 2022, CSI Solar launched the SolBank, an exciting new, self-manufactured battery storage product. The SolBank is a lithium iron phosphate (LiFePO4) chemistry-based battery enclosure with up to 2.8 MWh of usable energy capacity, specifically engineered for utility-scale applications. The SolBank is designed with liquid cooling and humidity control, active balancing BMS (Battery Management System) technologies, and complies with the latest international safety and compliance standards. CSI Energy Storage produces the SolBank on fully automated, state-of-the-art production and testing facilities.

The table below sets forth CSI Energy Storage’s battery storage manufacturing capacity expansion targets.

Operating Results 

The following table presents select unaudited 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:

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 shutdowns, supply chain constraints, and geopolitical conflicts. Management’s views and estimates are subject to change without notice.

For the fourth quarter of 2022, the Company expects total revenues to be in the range of $1.8 billion to $1.9 billion. Gross margin is expected to be between 16% to 18%. Total module shipments recognized as revenues by CSI Solar are expected to be in the range of 6.0 GW to 6.3 GW, including approximately 290 MW to the Company’s own projects.

For the full year of 2022, the Company expects CSI Solar’s total battery storage shipments to be in the range of 1.8 GWh to 1.9 GWh, including approximately 300 MWh to the Company’s own projects. Global Energy project sales are expected to be in the range of 2.2 GW to 2.3 GW.

For the full year of 2023, the Company expects total module shipments to be in the range of 30 GW to 35 GW.

Dr. Shawn Qu, Chairman and CEO, commented, “We continue to focus on profitable growth, investing in our industry leading product roadmap, and further expansion of our global solar and battery storage businesses, as we build long-term value for shareholders. Global demand remains very strong and previous supply chain and cost headwinds are improving with lower input and logistics costs. We still face near-term challenges with volatility in foreign exchange rates, which we are closely monitoring and will continue to take appropriate actions to mitigate the impact.”

Recent Developments

On November 3, 2022, Canadian Solar announced that its majority-owned subsidiary CSI Solar received France’s Simplified Carbon Assessment (Evaluation carbone simplifiée or ECS) certification and Italy’s Environmental Product Declaration (EPD) certification for its high-efficiency mono-facial and bifacial modules, using 182mm and 210mm silicon wafers. Canadian Solar’s modules have some of the lowest carbon footprints among crystalline solar modules in the market and will play a critical role in supporting customers’ decarbonization goals. 

On October 18, 2022, Canadian Solar announced that Crimson Storage, a 350 MW / 1,400 MWh standalone energy storage project, reached commercial operation and will be providing flexible capacity to the California grid. A fund managed by Axium Infrastructure US Inc. owns 80% of the project and Recurrent Energy, the project developer, retains 20% ownership. CSI Energy Storage was the turnkey system integrator of the project, delivering the EPC services and will provide long-term operational services for the project.

On September 13, 2022, Canadian Solar announced the launch of the EP Cube, a lightweight and sleek all-in-one residential energy storage solution by its majority-owned subsidiary CSI Solar. The EP Cube solution can be stacked for 9.9 kWh to 19.9 kWh capacities. Up to six units can be connected in parallel to deliver up to 119.9 kWh of storage and 45.6 kW output, which is more than enough to fully power the average home with high-surge-current appliances and AC units.

On September 1, 2022, Canadian Solar announced that it was awarded a 253 MWp solar plus 1,000 MWh battery energy storage project in Chile’s public tender CNE 2022/01 held by Chile’s Energy National Commission (CNE) in July 2022. The project is expected to start construction in 2024 and reach commercial operation in 2026. Once in operation, part of the electricity generated by solar will be purchased by a pool of distribution companies under 15-year U.S. dollar-dominated power purchase agreements (PPAs), and the remaining will be purchased by private energy off-takers.

Conference Call Information The Company will hold a conference call on Tuesday, November 22, 2022, at 8:00 a.m. U.S. Eastern Standard Time (9:00 p.m., Tuesday, November 22, 2022, in Hong Kong) to discuss its third quarter 2022 results and business outlook. The dial-in phone number for the live audio call is +1-877-704-4453 (toll-free from the U.S.), 800-965-561 (toll-free from Hong Kong), 400-1202-840 (local dial-in from Mainland China) or +1-201-389-0920 from international locations. The conference ID is 13733777. 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 11:00 p.m. U.S. Eastern Standard Time on Tuesday, December 6, 2022 (12:00 noon, December 7, 2022, in Hong Kong) and can be accessed by +1-844-512-2921 (toll-free from the U.S.), or +1-412-317-6671 from international locations. The replay pin number is 13733777. A webcast replay will also be available on the investor relations section of Canadian Solar’s website at