- \n
- Solar module shipments of 3.1 GW in the first quarter of 2021, compared to guidance of 3.0 GW to 3.2 GW.<\/li>\n
- Revenue increased 32% year-over-year (“yoy”) to\u00a0$1.1 billion, compared to guidance of\u00a0$1.0 billion\u00a0to\u00a0$1.1 billion.<\/li>\n
- Gross margin of 17.9%, compared to guidance range of 16% to 18%.<\/li>\n
- Net income attributable to\u00a0Canadian Solar\u00a0of\u00a0$23 million, or\u00a0$0.36\u00a0per diluted share.<\/li>\n
- 1.2 GWh of battery storage projects under construction.<\/li>\n
- Total battery storage project development pipeline nearly doubled to 17 GWh.<\/li>\n
- Strategic partnership and investment in\u00a0Habitat Energy\u00a0to strengthen battery storage capabilities.<\/li>\n
- Carve-out IPO of\u00a0CSI Solar\u00a0subsidiary remains on track.<\/li>\n<\/ul>\n
<\/p>\n
First Quarter 2021 Results<\/strong><\/p>\n
Total module shipments in the first\u00a0quarter of 2021 were 3,139 MW, a 42% yoy increase and 5% quarter-over-quarter (“qoq”) increase. Of the total, 267 MW\u00a0was shipped\u00a0to the Company’s own utility-scale solar power projects.<\/p>\n
<\/p>\n
Net revenue in the first quarter of 2021 grew by 32% yoy and 5% qoq to\u00a0$1,089\u00a0million.\u00a0The sequential increase\u00a0was driven by higher project sales in\u00a0Japan\u00a0and\u00a0the United States, a higher module average selling price (“ASP”), which was partially offset by lower module shipments recognized as revenues.<\/p>\n
<\/p>\n
Gross profit in the first quarter of 2021 was\u00a0$195 million, up 38% qoq but down 13% yoy.\u00a0Gross margin in the first quarter of 2021 was 17.9%, compared to guidance of 16% to 18%, and 13.6% in the fourth quarter of 2020.\u00a0The sequential gross margin expansion was mainly driven by an increased contribution of high margin project sales and higher module ASP, which was partially offset by higher manufacturing costs.<\/p>\n
<\/p>\n
Total operating expenses in the first quarter of 2021 were $151\u00a0million compared to\u00a0$139 million in the fourth\u00a0quarter of 2020.\u00a0The\u00a0sequential\u00a0increase was primarily driven by an increase in shipping and handling expenses, partially offset by a decrease in asset impairment expenses.<\/p>\n
<\/p>\n
Non-cash depreciation and amortization charges in the first quarter of 2021 were $62\u00a0million,\u00a0compared to $59\u00a0million in the fourth\u00a0quarter of 2020, and\u00a0$45 million\u00a0in the first quarter of 2020.<\/p>\n
<\/p>\n
Net foreign exchange loss in the first quarter of 2021 was\u00a0$7 million, compared to a net gain of\u00a0$4 million\u00a0in the fourth\u00a0quarter of 2020 and a net loss of\u00a0$1 million\u00a0in the first\u00a0quarter of 2020. The net loss was primarily driven by strength in the\u00a0U.S.\u00a0Dollar relative to the Japanese Yen.<\/p>\n
<\/p>\n
Income tax expense in the first quarter of 2021 was\u00a0$14 million, compared to\u00a0$2 million\u00a0of income tax benefit in the fourth quarter of 2020 and\u00a0$29 million\u00a0of income tax benefits in the first quarter of 2020.\u00a0The expense was mainly driven by an increase in pre-tax income from high tax jurisdictions and certain non-deductible items.<\/p>\n
<\/p>\n
Net income attributable to\u00a0Canadian Solar\u00a0in the first quarter of 2021 was $23\u00a0million, or\u00a0$0.36\u00a0per diluted share, compared to net income of\u00a0$7 million, or\u00a0$0.11\u00a0per diluted share in the fourth quarter of 2020.<\/p>\n
<\/p>\n
Net cash used by operating activities in the first quarter of 2021 was $83\u00a0million, compared to\u00a0$120 million\u00a0provided by operating activities\u00a0in the fourth\u00a0quarter of 2020. The operating cash outflow was mainly driven by an increase in strategic inventory in key markets such as the\u00a0U.S.\u00a0and\u00a0Europe\u00a0to<\/span> reduce the impact of upstream supply chain disruptions.<\/span><\/p>\n
<\/p>\n
Total debt in the first quarter of 2021 was\u00a0$2.28 billion, compared to\u00a0$2.18 billion\u00a0in the fourth quarter of 2020. The increase in total debt was mainly driven by increase in non-recourse debt used to finance solar power projects, which increased to\u00a0$522 million\u00a0in the first quarter of 2021 from\u00a0$434 million\u00a0in the fourth quarter of 2020.<\/p>\n
<\/p>\n
Battery Storage Opportunities<\/strong><\/p>\n
Canadian Solar\u00a0is one of the early movers in developing and supplying energy storage solutions and projects. The Company has strategically positioned itself in the battery storage market, both in solar plus battery storage, as well as in stand-alone storage opportunities. The rapid growth of the energy storage market is being driven by technology improvements, declining battery storage costs, rising penetration of renewable energy and accelerating retirements of fossil fuel capacity.<\/p>\n
<\/p>\n
Canadian Solar\u00a0has a competitive advantage given its global leadership in both module manufacturing and solar project development. Both\u00a0CSI Solar\u00a0and Global Energy have focused strategically on their respective energy storage businesses:<\/p>\n
<\/p>\n
- \n
- Under Global Energy, energy storage project development is now fully integrated within the main solar development teams. Given the segment’s large and growing pipeline, it is positioned to capture utility-scale energy storage projects.<\/li>\n
- Under\u00a0CSI Solar, the battery storage solutions’ team focuses on delivering bankable, end-to-end, integrated battery storage solutions for utility scale, commercial and industrial, as well as residential applications. These systems solutions will be complemented with long term service agreements, including future battery capacity augmentation services.<\/li>\n<\/ul>\n
<\/p>\n
While there are synergies between the project team and the solutions team, both operate independently and on different sections of the battery storage value chain. The project pipeline for each team should be assessed independently. Please refer to the Global Energy and\u00a0CSI Solar\u00a0sections of this document for specific pipeline figures.<\/p>\n
<\/p>\n
Global Energy Segment<\/strong><\/p>\n
Canadian Solar\u00a0has 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 5.7 GWp of solar power plants across six continents. As one of the early movers, the Company has built a leadership position in solar as well as energy storage project development and currently has an aggregate pipeline of nearly 21 GWp and 17 GWh, respectively.<\/p>\n
<\/p>\n
The continued pipeline expansion and strong project development track record will support Global Energy’s growth in three key areas:<\/p>\n
<\/p>\n
- \n
- Project sales<\/strong>: The Company intends to grow its volume of project sales by a compound annual growth rate of 25% over the next five years, well ahead of global market growth rate of approximately 20% according to many research reports.<\/li>\n
- Investment vehicles<\/strong>: The Company intends to optimize 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 2025, the Company intends to reach at least 1 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 will be able to recycle a large portion of the capital into developing new solar projects for growth. Meanwhile,\u00a0Canadian Solar\u00a0expects to capture additional operational value throughout the partial ownership period, including long-term cash flows from power sales, operations and maintenance (O&M), asset management and other services (see point 3). The Company currently owns a 15% stake in the\u00a0Canadian Solar Infrastructure Fund\u00a0(“CSIF”, TSE: 9284), the largest listed Japanese infrastructure fund\u00a0on the\u00a0Tokyo Stock Exchange. The Company also established the\u00a0Brazilian Participation Fund for Infrastructure\u00a0projects (FIP-IE). Similar project investment vehicles in certain European countries are also currently underway. Through launching these localized vehicles,\u00a0Canadian Solar\u00a0is building up its expertise in designing investment vehicles in local markets that will help maximize value of its project assets.<\/li>\n
- Services<\/strong>:\u00a0Canadian Solar\u00a0currently 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 11 GW of projects under O&M agreements by 2025.<\/li>\n<\/ol>\n
<\/p>\n
Management targets to achieve the following over the next 5 years:<\/p>\n
\n\n\n
\n Global Energy Targets<\/b><\/td>\n 2021<\/b><\/td>\n 2022<\/b><\/td>\n 2023<\/b><\/td>\n 2024<\/b><\/td>\n 2025<\/b><\/td>\n<\/tr>\n \n Annual Project Sales, GWp<\/td>\n 1.8-2.3<\/td>\n 2.4-2.9<\/td>\n 3.2-3.7<\/td>\n 3.6-4.1<\/td>\n 4.0-4.5<\/td>\n<\/tr>\n \n Cumulative Projects Retained, MWp<\/td>\n ~200<\/td>\n ~400<\/td>\n ~760<\/td>\n ~960<\/td>\n ~1,000<\/td>\n<\/tr>\n \n Operational O&M projects, GWp<\/td>\n ~2.6<\/td>\n ~4.0<\/td>\n ~6.5<\/td>\n ~9.2<\/td>\n ~11.0<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n <\/p>\n
Total Solar Project Pipeline<\/u><\/i><\/p>\n
As\u00a0March 31, 2021, the Company’s total project pipeline was 20.8 GWp, including 1.8 GWp under construction, 3.7 GWp of backlog, and 15.4 GWp of earlier stage pipeline. The backlog includes projects that have passed their Risk Cliff Date and are expected to be built in the next one to four years. A project’s Risk Cliff Date depends on the country where the project is located and is defined as the date on which the project passes the last high-risk development stage. This is usually after the projects have received all the required environmental and regulatory approvals, interconnection agreements, feed-in tariff (“FIT”) arrangements and power purchase agreements (“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.<\/p>\n
<\/p>\n
The Company’s pipeline includes early- to mid-stage project opportunities currently under development but that are yet to be de-risked.<\/p>\n
<\/p>\n
The following table presents the Company’s total project pipeline.<\/p>\n
\n\n\n
\n \n Total Project Pipeline (as of\u00a0March 31, 2021) \u2013 MWp<\/b><\/p>\n<\/td>\n<\/tr>\n
\n Region<\/b><\/td>\n In Construction<\/b><\/td>\n Backlog<\/b><\/td>\n Pipeline<\/b><\/td>\n Total<\/b><\/td>\n<\/tr>\n \n North America<\/td>\n 443<\/td>\n 744<\/td>\n 4,758<\/td>\n 5,945<\/b><\/td>\n<\/tr>\n \n Latin America<\/td>\n 859*<\/td>\n 2,098*<\/td>\n 3,371<\/td>\n 6,328<\/b><\/td>\n<\/tr>\n \n Europe, the\u00a0Middle East\u00a0and\u00a0Africa\u00a0(“EMEA”)<\/td>\n –<\/td>\n 400*<\/td>\n 3,519<\/td>\n 3,919<\/b><\/td>\n<\/tr>\n \n Japan<\/td>\n 159<\/td>\n 150<\/td>\n 147<\/td>\n 456<\/b><\/td>\n<\/tr>\n \n Asia Pacific\u00a0excluding\u00a0Japan\u00a0and\u00a0China<\/td>\n 348<\/td>\n 191<\/td>\n 1,667<\/td>\n 2,206<\/b><\/td>\n<\/tr>\n \n China\u00a0(part of\u00a0CSI Solar)<\/td>\n –<\/td>\n 80<\/td>\n 1,900<\/td>\n 1,980<\/b><\/td>\n<\/tr>\n \n Total<\/b><\/td>\n 1,809<\/b><\/td>\n 3,663<\/b><\/td>\n 15,362<\/b><\/td>\n 20,834<\/b><\/td>\n<\/tr>\n \n *Note: Gross MWp size of projects includes 573 MWp in construction in\u00a0Latin America,<\/em><\/p>\n and 110 MWp in backlog in EMEA, that are not owned by\u00a0Canadian Solar\u00a0or have been sold to third parties.<\/em><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n
The Company has a sizable amount of premium, high FIT projects in\u00a0Japan. The table below sets forth the expected COD schedule of the Company’s project backlog in development and construction in\u00a0Japan<\/strong>, as of\u00a0March 31, 2021:<\/p>\n
<\/p>\n
Expected COD Schedule\u00a0\u2013\u00a0MWp\u00a0<\/strong><\/p>\n
\n\n\n
\n 2021<\/b><\/td>\n 2022<\/b><\/td>\n 2023 and
\nThereafter<\/b><\/td>\nTotal<\/b><\/td>\n<\/tr>\n \n 44<\/td>\n 190<\/td>\n 74<\/td>\n 308<\/b><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n <\/p>\n
Battery Storage Project Pipeline<\/u><\/em><\/p>\n
The Global Energy segment has been actively developing utility-scale solar plus energy storage projects, as well as stand-alone battery storage projects. The\u00a0Company found that virtually all its solar power projects under development can co-host energy storage facilities and has done so during the first quarter of 2021. This approach has helped the Company nearly double its energy storage pipeline to almost 17 GWh during the quarter. By co-hosting energy storage facilities with solar power plants on the same piece of land and using the same interconnection point, the Company expects to significantly enhance the value of its assets under development.<\/p>\n
<\/p>\n
Over the past years,\u00a0Canadian Solar\u00a0has signed several new 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.<\/p>\n
<\/p>\n
The table below sets forth\u00a0Global Energy’s storage project development<\/strong>\u00a0backlog and pipeline.<\/p>\n
\n\n\n
\n \n Storage<\/b>\u00a0Project Development Backlog and Pipeline<\/b>\u00a0<\/b>(as of\u00a0March 31, 2021) \u2013 MWh<\/b><\/p>\n<\/td>\n<\/tr>\n
\n Region<\/b><\/td>\n In Construction<\/b><\/td>\n Backlog<\/b><\/td>\n Pipeline<\/b><\/td>\n Total<\/b><\/td>\n<\/tr>\n \n North America<\/td>\n 1,201<\/td>\n 1,100<\/td>\n 8,405<\/td>\n 10,706<\/b><\/td>\n<\/tr>\n \n Latin America<\/td>\n –<\/td>\n –<\/td>\n 3,200<\/td>\n 3,200<\/b><\/td>\n<\/tr>\n \n Europe, the\u00a0Middle East\u00a0and\u00a0Africa\u00a0(“EMEA”)<\/td>\n –<\/td>\n –<\/td>\n 1,314<\/td>\n 1,314<\/b><\/td>\n<\/tr>\n \n Japan<\/td>\n –<\/td>\n –<\/td>\n 5<\/td>\n 5<\/b><\/td>\n<\/tr>\n \n Asia Pacific\u00a0excluding\u00a0Japan<\/td>\n –<\/td>\n –<\/td>\n 1,650<\/td>\n 1,650<\/b><\/td>\n<\/tr>\n \n Total<\/b><\/td>\n 1,201<\/b><\/td>\n 1,100<\/b><\/td>\n 14,574<\/b><\/td>\n 16,875<\/b><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n <\/p>\n
Solar Power Plants and Battery Storage Projects in Operation<\/u><\/em><\/p>\n
As of\u00a0March\u00a031, 2021, the Company’s solar power plants in operation totaled 477 MWp, with a combined estimated net resale value of approximately $420\u00a0million to\u00a0Canadian Solar. The estimated resale value is based on selling prices that\u00a0Canadian Solar\u00a0is currently negotiating or transaction prices of similar assets in the relevant markets.<\/p>\n
<\/p>\n
The Company owned 3 MWh of battery storage projects in operation in\u00a0North America.<\/p>\n
\n\n\n\n
\n Solar Power Plants in Operation \u2013 MWp<\/b><\/td>\n<\/tr>\n \n Latin America<\/b><\/td>\n Japan<\/b><\/td>\n Asia Pacific\u00a0<\/b><\/p>\n ex.\u00a0Japan\u00a0and\u00a0China<\/b><\/td>\n
China<\/b><\/td>\n Total<\/b><\/td>\n<\/tr>\n \n 100<\/td>\n 14<\/td>\n 61<\/td>\n 302<\/td>\n 477<\/b><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<\/div>\n Note: Gross MWp size of projects, includes\u00a0<\/i>26<\/i>\u00a0MWp in\u00a0Asia Pacific\u00a0ex.\u00a0Japan\u00a0and\u00a0China\u00a0already sold to third parties.\u00a0China\u00a0portfolio is part of\u00a0CSI Solar.<\/i><\/p>\n
<\/p>\n
Operating Results<\/u><\/em><\/p>\n
The following table presents unaudited select results of operations data of the Company’s Global Energy segment.<\/p>\n
\n\n\n
\n \n Global Energy Segment Financial Results<\/b><\/p>\n
(<\/b>In Thousands of\u00a0U.S.\u00a0Dollars, Except Percentages and Unless Otherwise Stated)<\/b><\/p>\n<\/td>\n<\/tr>\n
\n <\/td>\n Three Months Ended<\/b><\/td>\n<\/tr>\n \n <\/td>\n March 31,
\n2021<\/b><\/td>\nDecember<\/b><\/p>\n 31<\/b>, 2020<\/b><\/td>\n
March 31,
\n2020*<\/b><\/td>\n<\/tr>\n\n Net revenues<\/td>\n 471,062<\/td>\n 372,617<\/td>\n 242,550<\/td>\n<\/tr>\n \n Cost of revenues<\/td>\n 358,037<\/td>\n 340,403<\/td>\n 153,934<\/td>\n<\/tr>\n \n Gross profit<\/td>\n 113,025<\/td>\n 32,214<\/td>\n 88,616<\/td>\n<\/tr>\n \n Operating expenses<\/td>\n 27,944<\/td>\n 30,434<\/td>\n 27,786<\/td>\n<\/tr>\n \n Income from operations<\/td>\n 85,081<\/td>\n 1,780<\/td>\n 60,830<\/td>\n<\/tr>\n \n Gross margin<\/i><\/td>\n 24.0%<\/i><\/td>\n 8.6%<\/td>\n 36.5%<\/i><\/td>\n<\/tr>\n \n Operating margin<\/i><\/td>\n 18.1%<\/i><\/td>\n 0.5%<\/td>\n 25.1%<\/i><\/td>\n<\/tr>\n \n *Historical values of first quarter of 2020 have been revised to conform to current period presentation<\/i><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n <\/p>\n
CSI Solar Segment<\/strong><\/p>\n
CSI Solar’s\u00a02021 capacity expansion targets are detailed below.\u00a0 All new capacity will produce\u00a0CSI Solar’s\u00a0next generation high-power, high-efficiency modules in the HiKu and BiHiKu product portfolios.<\/p>\n
<\/p>\n
Manufacturing Capacity, GW (period-end)<\/u><\/strong><\/p>\n
\n\n\n
\n <\/td>\n FY20<\/b><\/td>\n 1H21 Plan<\/b><\/td>\n FY21 Plan<\/b><\/td>\n<\/tr>\n \n Ingot<\/td>\n 2.1<\/td>\n 5.1<\/td>\n 5.1<\/td>\n<\/tr>\n \n Wafer<\/td>\n 6.3<\/td>\n 10.3<\/td>\n 10.3<\/td>\n<\/tr>\n \n Cell<\/td>\n 9.6<\/td>\n 12.9<\/td>\n 13.3<\/td>\n<\/tr>\n \n Module<\/td>\n 16.1<\/td>\n 22.2<\/td>\n 25.7<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n Note:\u00a0CSI Solar’s\u00a0capacity expansion plans are subject to change without notice based on market conditions and capital allocation plans.<\/p>\n
<\/p>\n
Operating Results<\/u><\/i><\/p>\n
The following table presents unaudited select results of operations data of the\u00a0CSI Solar\u00a0segment for the periods indicated.<\/p>\n
\n\n\n
\n \n CSI Solar Segment Financial Results<\/b>*<\/b>\u00a0<\/b><\/p>\n
(In Thousands of\u00a0U.S.\u00a0Dollars, Except Percentages and Unless Otherwise Stated)<\/b><\/p>\n<\/td>\n<\/tr>\n
\n <\/td>\n \n Three Months Ended<\/b><\/p>\n<\/td>\n<\/tr>\n
\n <\/td>\n March 31,
\n2021<\/b><\/td>\nDecember<\/b><\/p>\n 31, 2020<\/b><\/td>\n
March 31,
\n2020**<\/b><\/td>\n<\/tr>\n\n Net revenues<\/td>\n 695,152<\/td>\n 784,588<\/td>\n 689,747<\/td>\n<\/tr>\n \n Cost of revenues<\/td>\n 627,694<\/td>\n 678,410<\/td>\n 527,578<\/td>\n<\/tr>\n \n Gross profit<\/td>\n 67,458<\/td>\n 106,178<\/td>\n 162,169<\/td>\n<\/tr>\n \n Operating expenses<\/td>\n 120,126<\/td>\n 103,378<\/td>\n 77,988<\/td>\n<\/tr>\n \n Income (loss) from operations<\/td>\n (52,668)\u00ad<\/td>\n 2,800<\/td>\n 84,181<\/td>\n<\/tr>\n \n Gross margin<\/i><\/td>\n 9.7%<\/i><\/td>\n 13.5%<\/i><\/td>\n 23.5%<\/i><\/td>\n<\/tr>\n \n Operating margin<\/i><\/td>\n -7.6%<\/i><\/td>\n 0.4%<\/i><\/td>\n 12.2%<\/i><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n *\u00a0Includes\u00a0effects of both sales to\u00a0third party customers\u00a0and to\u00a0the Company’s Global Energy\u00a0Segment.\u00a0Please refer to the attached financial tables for intercompany transaction elimination information. Income from operations reflects management’s allocation and estimate as some services are shared by the Company’s two business segments.<\/em><\/p>\n
** Historical values of first quarter of 2020 have been revised to conform with current period presentation<\/em><\/p>\n
<\/p>\n
The table below provides the geographic distribution of the net revenue of\u00a0CSI Solar:<\/p>\n
\n\n\n
\n \n CSI Solar Net Revenues Geographic Distribution* (In Millions of\u00a0U.S.\u00a0Dollars, Except Percentages)<\/b><\/p>\n<\/td>\n<\/tr>\n
\n <\/td>\n Q1 2021<\/b><\/td>\n % of Net
\nRevenues<\/b><\/td>\nQ4 2020<\/b><\/td>\n % of Net
\nRevenues<\/b><\/td>\nQ1 2020<\/b><\/td>\n % of Net
\nRevenues<\/b><\/td>\n<\/tr>\n\n Asia<\/td>\n 240<\/td>\n 39<\/td>\n 414<\/td>\n 62<\/td>\n 174<\/td>\n 30<\/td>\n<\/tr>\n \n Americas<\/td>\n 261<\/td>\n 42<\/td>\n 149<\/td>\n 22<\/td>\n 249<\/td>\n 43<\/td>\n<\/tr>\n \n Europe\u00a0and others<\/td>\n 117<\/td>\n 19<\/td>\n 105<\/td>\n 16<\/td>\n 160<\/td>\n 27<\/td>\n<\/tr>\n \n Total<\/td>\n 618<\/td>\n 100<\/td>\n 668<\/td>\n 100<\/td>\n 583<\/td>\n 100<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n *Excludes sales from\u00a0CSI Solar\u00a0to Global Energy.<\/i><\/p>\n
<\/p>\n
CSI Solar\u00a0shipped 3.1 GW of modules to more than 70\u00a0countries in the first\u00a0quarter of 2021.\u00a0The top five markets ranked by shipments were the\u00a0U.S.,\u00a0China,\u00a0Brazil,\u00a0Australia\u00a0and\u00a0Japan.<\/p>\n
<\/p>\n
Battery Storage Solutions<\/u><\/em><\/p>\n
The Company is one of the early movers in developing system solutions and energy storage integration services. Within\u00a0CSI Solar, the battery storage solutions team delivers competitive turnkey, integrated battery storage solutions, including bankable and fully wrapped capacity and performance guarantees. These guarantees are complemented with long term operations and maintenance agreements, which include future battery capacity augmentation services and bring in longer term, stable income.<\/p>\n
<\/p>\n
The table below sets forth\u00a0CSI Solar’s\u00a0battery storage system integration’s\u00a0<\/strong>contracted projects and\/or under construction, those in high probability forecast, and pipeline, as of\u00a0March 31, 2021.<\/p>\n
\n\n\n
\n <\/td>\n Contracted\/<\/b><\/p>\n In Construction<\/b><\/td>\n
Forecast<\/b><\/td>\n Pipeline<\/b><\/td>\n Total<\/b><\/td>\n<\/tr>\n \n Storage (MWh)<\/td>\n 861<\/td>\n 1,400<\/td>\n 4,842<\/td>\n 7,103<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n 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.<\/p>\n
<\/p>\n
Business Outlook<\/strong><\/p>\n
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, and the global impact of the ongoing COVID-19 pandemic. Management’s views and estimates are subject to change without notice.<\/p>\n
<\/p>\n
For the second\u00a0quarter of 2021, the Company expects total module shipments to be in the range of 3.5 GW to 3.7 GW, including approximately 80 MW of module shipments to the Company’s own projects. Total revenues are expected to be in the range of\u00a0$1.4 billion\u00a0to\u00a0$1.5 billion. Gross margin is expected to be between 9.5% and 10.5%.<\/p>\n
<\/p>\n
The Company reiterates full year 2021 total module shipment guidance of 18 GW to 20 GW\u00a0and project sales guidance of 1.8 GW to 2.3 GW. The Company introduces 2021 total battery storage shipment guidance of 810 MWh to 860 MWh. Total revenue guidance for 2021 remains unchanged, expected to be in the range of\u00a0$5.6 billion\u00a0to\u00a0$6.0 billion.<\/p>\n
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- Investment vehicles<\/strong>: The Company intends to optimize 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 2025, the Company intends to reach at least 1 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 will be able to recycle a large portion of the capital into developing new solar projects for growth. Meanwhile,\u00a0Canadian Solar\u00a0expects to capture additional operational value throughout the partial ownership period, including long-term cash flows from power sales, operations and maintenance (O&M), asset management and other services (see point 3). The Company currently owns a 15% stake in the\u00a0Canadian Solar Infrastructure Fund\u00a0(“CSIF”, TSE: 9284), the largest listed Japanese infrastructure fund\u00a0on the\u00a0Tokyo Stock Exchange. The Company also established the\u00a0Brazilian Participation Fund for Infrastructure\u00a0projects (FIP-IE). Similar project investment vehicles in certain European countries are also currently underway. Through launching these localized vehicles,\u00a0Canadian Solar\u00a0is building up its expertise in designing investment vehicles in local markets that will help maximize value of its project assets.<\/li>\n
- Project sales<\/strong>: The Company intends to grow its volume of project sales by a compound annual growth rate of 25% over the next five years, well ahead of global market growth rate of approximately 20% according to many research reports.<\/li>\n
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