DMSolar Blog

Tuesday 02 February 2010

President Barack Obama’s $28.4 billion fiscal year 2011 (FY 2011) budget request includes investments in clean energy and the elimination of subsidies for the oil, coal and gas industries.

Specifically, the president’s FY 2011 budget request includes the following:

* Lending authority to support approximately $40 billion in loan guarantees for innovative clean energy programs;

* More than $108 million in new funding to advance and expand research in the areas of wind, solar and geothermal energies;

* More than $217 million in new funding for science research and discovery, including an additional $40 million for the existing Energy Frontier Research Centers program and $107 million for Energy Innovation Hubs; and

* $300 million for the Advanced Research Project Agency – Energy.

In developing this budget, several program reductions and terminations are proposed, including eliminating more than $2.7 billion in tax subsidies for the oil, coal and gas industries. This step is estimated to generate more than $38.8 billion in revenue for the federal government over the course of the next 10 years.

The budget includes $302.4 million for the solar energy program, a 22% increase from last year’s spending, according to the Solar Energy Industries Association (SEIA). The Department of Energy’s (DOE) Building Technologies budget includes another $7.2 million for solar heating and cooling, also an increase over last year.

These increases comes at a time when most of the government received substantial budget reductions, SEIA notes. In addition to the solar program, the president has requested a $5 billion expansion the Section 48C manufacturing tax credit that was passed in the American Recovery and Reinvestment Act. SEIA expects to see the expansion of this program pass as part of the Jobs Bill now under development.

The breakdown of the DOE Solar Energy Program is as follows:

* $152 million for PV, increased from $128.5 million;

* $98.2 million for concentrating solar power (CSP) – including $50 million for a new demonstration program – increased from $49.7 million;

* $30.7 million for systems integration, increased from $23.3 million; and

* $21.5 million for market transformation, decreased from $23.5 million.

The DOE Building Technologies Program includes $7.3 million for solar heating and cooling. Transmission-related budget requests include continued support for renewable generators and reliability, as well as an additional $6.4 million for “permitting, siting and analysis” to educate states, regional grid operators, federal agencies and help assist in modernizing the electric grid. The Department of the Interior budget includes a total of $73 million investment in renewable energy.

The United Kingdom is setting out to lead the world in home energy-efficiency, and on Monday, it unveiled a key incentive: paying homeowners who produce low-carbon power such as solar or wind.

Beginning in April, consumers will be paid for the electricity they generate, even if they use it themselves. The amount will depend on the technology used.

A homeowner could earn up to 900 pounds ($1,433) each year for a typical 2.5 kilowatt solar photovoltaic system and save an additional 140 pounds ($223 ) on their annual electricity bill, according to an announcement by the UK’s Department of Energy and Climate Change.

In April 2011, the UK says it will be the first country to begin paying people who install low-carbon heating technologies such as ground source or geothermal heat pumps, biomass boilers and air source heat pumps.

These efforts aim to help consumers achieve the country’s ground-breaking requirement that all new homes, beginning in 2016, emit zero carbon, which means they have to produce enough power to offset any they use.

The U.S. government does not pay people to produce low-carbon power or use low-carbon heating, but it does offer 30% tax credits for the installation of such systems. Local and state incentives also exist.

UK’s Energy Secretary Ed Miliband said he expects one in 10 homes could be producing their own electricity by the end of the decade. In the announcement, he explained the cash incentives:

The guarantee of getting an income on top of saving on energy bills will be an incentive to householders and communities wanting to make the move to low carbon living.

The feed-in tariff will change the way householders and communities think about their future energy needs, making the payback for investment far shorter than in the past.

It will also change the outlook for a range of industries, in particular those in the business of producing and installing small scale low carbon technology.”

The United Kingdom currently gets about 5.5% of electricity and less than 1% of its heat from renewable sources but wants to increase both those amounts to meet its targets for reducing greenhouse gas emissions.

CHANGZHOU, China — In other tech revolutions of recent decades, Silicon Valley became the uncontested global leader. The region’s ability to innovate its way to the top in cleantech, though, is far from guaranteed. Competition is fierce and global, with trillions of dollars at stake.

One of the valley’s greatest challenges comes from here. China’s drive to be a dominant power in the emerging global cleantech industry was on display one recent morning on the campus of the nation’s third-largest solar-panel maker, Trina Solar. New assembly-line employees, in an exercise designed to instill discipline, marched military-style around the grid-like campus, chanting responses to a drill leader dressed in army fatigues.

But China’s ambitions in cleantech reach far beyond piecing together solar panels. The central government has committed more than $100 billion a year to green technology research. It also has put in place incentives to create markets for everything from electric cars to rooftop solar water heaters to jump-start homegrown cleantech companies.

Provincial and local governments also are investing heavily in cleantech. Leaders in Jiangsu Province, where Trina Solar is located, are placing big bets on the solar industry, inspired by the municipal government of Wuxi. That Jiangsu Province city financially backed Suntech Power, now a global solar leader.
“China is moving very aggressively,” U.S. Energy Secretary Steven Chu said
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during a visit to Google’s Mountain View headquarters last fall. “They want to be a leader in this new industrial revolution.”

A group of valley tech executives, including former Intel CEO Andy Grove, recently sent a letter to Chu urging the energy secretary to “sound the alarm bell to make America aware — clearly and unequivocally — of how rapidly other nations, particularly China, are moving on clean energy.

“Unless we move quickly and commit substantial resources on a sustained basis, we risk becoming an energy also-ran, and risk developing a new dependency,” said the letter, also signed by Michael Splinter, CEO of Applied Materials, and John Doerr, a partner at venture capital firm Kleiner, Perkins, Caufield & Byers.

They urge the government to provide financial assistance to clean energy industries, including incentives for replacing polluting power plants with renewable sources of energy.

U.S. is lagging

Currently, only five of the world’s top 30 companies in the solar, wind and next-generation battery markets are based in the United States, according to John Denniston, also a partner with Kleiner.

U.S. government incentives — such as tax breaks and a regulation requiring utilities to buy power from solar and wind energy companies — were slowly eliminated in the 1980s after helping California become a global cleantech leader, said Ryan Wiser, a scientist at Lawrence Berkeley National Laboratory. Around the same time, Denmark, Germany and Spain — whose governments adopted policies and incentives to jump-start cleantech enterprises — were emerging as global leaders.

“China is doing it. Europe is doing it. If we don’t take the lead, instead of importing oil, we will be importing advanced technologies,” Denniston said.

The rewards are eye-popping — an estimated $7 trillion annual market for energy and transportation alone.

“When it comes to cleantech, we have the largest market opportunity in the history of the planet driven by global climate change, resource constraints and energy independence,” said Dallas Kachan, managing director of Cleantech Group. “Silicon Valley is critical to this revolution, but it does not occupy the throne it once did.”

China’s leaders see new energy technology as their country’s only hope to curtail the sky-blotting pollution that threatens economic progress as well as the health of its 1.3 billion citizens. They also view cleantech as a gold rush that will propel Chinese companies to world-domineering status.

In addition to investing in cleantech innovation, China’s central government has put in place market-driving policies for renewable energy: By 2020, at least 15 percent of the nation’s energy must come from sources such as wind and solar, more than double the current 7 percent. The United States has no comparable requirement, though California and about 30 other states have set voluntary goals.

At the local level, Chinese municipalities are building solar parks and offering cheap land and tax incentives to encourage cleantech companies to expand. State-owned banks offer financing to renewable energy companies at much lower interest rates than competitors can get in Europe or the United States.

The policies are paying off: China is now the world’s largest producer and exporter of solar cells. The cost of solar panels internationally has dropped by half — from $4 a watt to $2 a watt — in the past year and half, partly due to low labor costs and improved efficiencies in production in China.

China is also the largest hydropower generator in the world. And it is expected to soon pass the United States in new wind-power generation.

In October, a Chinese-U.S. consortium announced it will construct a $1.5 billion wind farm in Texas. For the first time a Chinese company will export wind turbines to the United States.

Sunnyvale-based Applied Materials recently opened what it calls the world’s largest non-government-backed solar-energy research facility in Xian in northwest China. First Solar, the Tempe, Ariz.-maker of thin-film solar panels, plans to take advantage of Chinese incentives to build one of the largest photovoltaic power plants in the world in China’s Inner Mongolia region.

In 2008, Warren Buffett’s MidAmerica Energy Holdings bought a 10 percent stake in BYD, the Shenzhen-based car company that plans to start selling electric automobiles in California later this year.

Beijing in driver’s seat

“Unless there’s a dramatic shift in national policy in the United States, the road to success in cleantech most likely goes through Beijing,” said Matthew Lewis, spokesman for the San Francisco office of ClimateWorks Foundation, an international philanthropic network that promotes clean energy. “From a policy perspective, they are doing everything right.”

That could not be said of the United States in recent years, according to venture capitalist Denniston. He said annual funding for the National Institutes of Health is about $30 billion, but just $1 billion a year has trickled into fundamental research into alternative energy.

But the Obama administration, to the applause of the cleantech industry and environmentalists, has made a robust cleantech industry a top priority. The stimulus bill included $80 billion to promote renewable energy. The president has also proposed spending $150 billion in clean energy research over 10 years.

Energy Secretary Chu, in his visit to Silicon Valley, announced $400 million in grants for academic researchers and startups developing clean technologies through the Advanced Research Projects Agency-Energy, a new organization modeled after the Pentagon’s Defense Advanced Research Projects Agency, or DARPA.

Peggy Liu, a former Silicon Valley Internet executive who founded Shanghai-based nonprofit Joint US-China Collaboration on Clean Energy (JUCCCE.com), says a key to the success of cleantech efforts in both the United States and China is partnerships. “I’m afraid people are setting up China as the enemy,” she said. “You need to treat China like a partner.”

Many valley companies agree. Santa Clara-based National Semiconductor, which is developing technology to squeeze more energy out of solar panels, hopes to sell its products to Chinese companies.

“China for us is a major opportunity,” Executive Chairman Brian Halla said. “It will be the very electronics that come out of Silicon Valley companies that will improve the efficiencies of these panels. (China-based) Suntech and others will be customers of National Semiconductor.”

One concern for the valley, though, is how much China will open up competition for its massive renewable energy projects to international companies. Lawrence Berkeley’s Wiser noted that Chinese government policy supports local companies and that it’s often cheaper to buy homegrown technology, even though foreign-made products may be more reliable.

“The question becomes, can U.S. companies participate in that growing market?” he said.

President Barack Obama last week announced the award of US $2.3 billion in Recovery Act Advanced Energy Manufacturing Tax Credits. One hundred eighty three projects in 43 states will receive that funds that are meant to help create tens of thousands of jobs through the domestic manufacturing of advanced clean energy technologies including solar, wind and efficiency and energy management technologies.

“Building a robust clean energy sector is how we will create the jobs of the future,” President Obama said. “The Recovery Act awards I am announcing today will help close the clean energy gap that has grown between America and other nations while creating good jobs, reducing our carbon emissions and increasing our energy security.”

The projects announced to receive the awards include PPG Industries Inc., which will use the funds to produce a double anti-reflective coating for glass to make solar cells more efficient, as well as to expand the manufacture of conductive oxide (TCO) coatings of glass substrates for solar panels.

Another renewable energy company getting an award is TPI Composites Inc., which is building a new manufacturing facility in Nebraska to produce next generation wind turbine blades. TPI says the facility will create over 200 new jobs and will have a capacity equivalent to supplying 265 turbines rated at 2.5 MW. TPI will also be expanding their existing manufacturing facility in Iowa to meet the anticipated increased demand for composite wind turbine blades.

While projects selected for this tax credit generally must be placed in service by 2014, approximately 30 percent of them will be completed in 2010.

One hundred eighty three projects have been selected for the tax credit to. They include Nanosolar, Stion and SunPower (all based in San Jose), as well as CaliSolar, Miasolé, Serious Materials and Solaicx. Read the full list of Selections for Section 48c Manufacturing Tax Credit by clicking here.

The government of the UK will introduce a Feed-in Tariff on solar power by April 2010. The scheme will offer individuals and businesses alike, that uses solar energy, with financial benefits.

Speaking at the recent Solar Flair 09, experts from the national photovoltaics conference said that the new program will open more possibilities for renewable energy.

The national photovoltaics conference was organized by the County Durham Development Company (CDDC) in support of the Electronics Knowledge Transfer Network (EKTN) based in Hardwick Hall in Sedgefield.

At hand, the renewable industry in the UK is lead by biomass technology followed by wind and hydro power generators. Photovoltaic industry (PV) barely makes impact due to its high costs. As a result, the government of the UK will introduce the Feed-in Tariff to make PV technology inexpensive not just for businesses wanting this teachnology but also to consumers who wants to install solar panels into their properties.

A question was raised on the conference on the effectiveness of solar panels over the UK’s less-sunshine environment. Tim Bruton, speaking in aid for the New and Renewable Energy Centre, said that if every south facing home in the UK gets fitted with solar panels, they can generate enough electricity to power the country.

The Feed-in Tariff project is set to increase employment in the installation area which is why the company One North East invested in a solar panel training centre and courses in preparation with the solar panel installation increase.

Similar PV schemes have been implemented in countries such as Germany and Spain and have proved an overwhelming achievement in placing these countries at the forefront of PV technology.

www.dmsolar.com

By the end of the year, the levelized cost of adding solar should be about half what it was in 2008, according to new analysis by New Energy Finance.

The 50 percent drop in levelized solar costs compares to about a 10 percent drop in levelized costs for other forms of renewable energy. The levelized cost refers to the lifetime cost per kilowatt hour before subsidies.

So far this year, the higher cost of financing has canceled out some of the savings from lower product costs, New Energy Finance says. But the group expects capital markets to free up significantly by year’s end, prompting its heady prediction of a 50 percent drop in the cost of adding solar.

Thin-film solar can cost as little as $3 per watt of installed capacity, making it the least expensive option – about 25 percent less than crystalline silicone systems. Prices for photovoltaic projects with tracking systems have not declined as much, however.

As for wind, turbine prices are about 18-20 percent lower than in early 2008. But as wind projects are moved offshore, the lower costs will be offset by the engineering and technical costs of adding turbines in a coastal environment, New Energy Finance says.

Finally, the cost of drilling for geothermal energy dropped by nearly 50 percent at certain times in the past year as a lack of financing and cheaper oil dried up the market, leading to a glut of drilling services. However, that market is starting to recover, with levelized costs up 8-10 percent in the last quarter alone.

According to a recent report from the National Renewable Energy Laboratory, California has nearly 530,000 kilowatts of direct current solar (kWdc) connected to the grid, followed by New Jersey (70,000 kWdc), Colorado (35,ooo kWdc), Nevada (34,000 kWdc) and Arizona (25,000 kWdc).

Texas leads all states in wind power capacity at 7,117 MW, followed by Iowa (2,791 MW), California (2,503 MW), Minnesota (1,753 MW) and Washington (1,446 MW).

www.dmsolar.com

A study by Environment North Carolina’s Research and Policy Center found that the Tar Heel State could derive a significant portion of its energy from solar power.

North Carolina has almost as much solar intensity as Florida, ENC noted, making its solar potential “vast.”

The only real limitations, says the environmental group, are a lack of usable space and the speed with which solar projects could be installed. “North Carolina is just waking up to its potential as a leader in the Southeast in solar energy development,” said NC Solar Center executive director Steve Kalland.

ENC projects that solar energy will account for 2 percent of the state’s electricity production by 2020 and 14 percent by 2030. To reach that goal by 2030, 700,000 solar panels would have to be put into service on the roofs of businesses and homes. But solar power in North Carolina is good for the state’s economy: nine times more jobs are created by installing solar power than installing fossil fuel power, ENC says.

Richard Harkrader, CEO of Carolina Solar Energy, cited solar’s cost-effectiveness, too. “In North Carolina,” he said, solar power “can now beat the price of electricity from new nuclear plants.”
ADNFCR-2111-ID-19468970-ADNFCR

ONTARIO, Canada, Nov. 17 /PRNewswire-Asia-FirstCall/ — Canadian Solar Inc. (the “Company”, “Canadian Solar” or “we”) (Nasdaq: CSIQ) today announced its unaudited financial results for the third quarter of 2009 ended September 30, 2009 and its outlook for the fourth quarter of 2009 and the full year 2010.

Net revenues for the third quarter of 2009 were $213.1 million, compared to net revenues of $114.2 million for the second quarter of 2009 and $252.4 million for the third quarter of 2008.

Net income for the third quarter of 2009 was $25.3 million, or $0.69 per diluted share, compared to $17.7 million, or $0.49 per diluted share, for the second quarter of 2009 and $11.1 million, or $0.31 per diluted share, for the third quarter of 2008.

Shipments for the third quarter of 2009 were 102.6 MW, compared to shipments of 48.2 MW for the second quarter of 2009 and 60 MW for the third quarter of 2008. Third quarter 2009 sales came from all geographic markets important to the solar industry, with Europe continuing to be the Company’s largest contributing geographic market. Sales in that region grew strongly in the quarter, increasing 179% from the second quarter of 2009.

Dr. Shawn Qu, Chairman and CEO of Canadian Solar, commented: “We broke our previous records on both MW shipment volumes and net profit in this quarter. The significant increases in sales and earnings were the result of the successful implementation of our global sales strategy combined with our strong brand name recognition, cost control and effective supply chain management. Our flexible vertical integration model allowed us to capture the sharp increase in market demand during the quarter and to raise our module sales faster than the growth of our internal cell capacity. Our R&D capability is another important competitive differentiator for Canadian Solar. During the quarter, three of our solar module products recorded the highest scores for P-type solar modules during the PV USA (PTC) tests, which are mandatory for the California Solar Initiatives. Subsequent to the quarter end, we pre-launched our high-output premium products using our enhanced selective emitter technology. These products are expected to have monocrystalline cell conversion efficiencies of 18.5% and multicrystalline cell efficiencies of 17%. We are also in the process of testing a cost effective two-axis tracker.”

Arthur Chien, CFO of Canadian Solar, noted: “We are pleased that we were able to aggressively grow our top line while delivering an 11.9% net margin. We remain focused on managing all operating and financing costs as we work to improve profitability. We expect the expansion of our internal cell facility in H1 2010 will help us to further offset ongoing industry pricing pressure, while at the same time increasing our manufacturing process control. Importantly, our disciplined management of our balance sheet continues to give us superior operating leverage and a low cost of financing. The recent successful closure of our follow-on stock offering in October further strengthened our balance sheet and prepares us for the Company’s expected growth in 2010.”

Revenue by Geography
3Q 2009 2Q 2009 3Q 2008
Region US$ million % US$ million % US$ million %

Asia 13.6 6.4% 31.1 27.2% 16.4 6.5%
Europe 186.6 87.6% 66.9 58.6% 222.4 88.1%
America 12.9 6.0% 16.2 14.2% 13.5 5.4%
Total 213.1 100.0% 114.2 100.0% 252.4 100.0%

Recent Developments
— We completed batch testing of our enhanced selective emitter cells and
pre-launched our first commercially available 250/260 W modules at the
Solar Power International conference in Anaheim. We have begun
converting the first cell line over to our proprietary enhanced
selective emitter technology and expect to begin limited commercial
delivery of 260 W enhanced selective emitter modules early in 2010.

— We have begun field-testing a two-axis tracker, which we believe will
be more effective but considerably less expensive than similar products
currently available on the market.

— Completed a follow-on public offering of 6.9 million shares on October
21, 2009, which raised net proceeds of approximately $103.3 million.

— Canadian Solar Japan recently received full JPEC certifications for our
residential roof solar systems and JET certification for our solar
modules. We have started to deliver these products to our Japanese
customers.

— Appointed Arthur Chien, our CFO, as our new Compliance Officer,
effective November 2, 2009.

— Appointed Charlotte Xi Klein as VP of Global Operations, effective
November 2, 2009. Ms. Klein joined Canadian Solar as corporate
controller in 2007 and most recently served as VP of Finance and
Compliance Officer, where she was also instrumental in establishing
Canadian Solar’s overseas operations during the past 12 months. Prior
to joining Canadian Solar, she spent 18 years in the United States,
where she obtained her MBA and MA degrees and worked her way up from
cost accounting to controllership in sizable corporate manufacturing
facilities, such as Saint-Gobain Corporation and Armstrong World
Industries. She was previously a financial executive at ARAMARK
Corporation, a Fortune 500 company. She is also a member of the AICPA
and has been a Texas-licensed CPA since 1996.

— Completed our recent expansion of solar module manufacturing capacity
to 820 MW, which we believe is the world’s third largest.

— On track in our Phase III solar cell capacity expansion, which we
expect to bring our cell capacity from 270MW to 420MW by December 2009.

Outlook for Q409 and 2010

The outlook below is based on the Company’s current views with respect to operating and market conditions, its current order book and customer’ forecasts, which are subject to change. The risks to our guidance also include changes in product pricing, availability and pricing of feedstock, and the project financing environment.

We are reiterating our fourth quarter 2009 guidance of shipments of approximately 128 MW to 138 MW, with gross margin expected to be in the high- teens on a percentage basis. We expect shipments of approximately 295 MW to 305 MW for the full year 2009.

For the full year 2010, we believe our shipments will be in the range of 600 MW to 700 MW. We believe that the demand for our high quality solar modules will come from all major markets, including Germany, Italy, the U.S., the Czech Republic, South Korea and Spain. We also expect strong growth from our newer markets, such as Canada, Japan and China.

Given the demand forecast, the Company plans to increase our solar module production capacity from today’s 820 MW to 1 GW by the end of April 2010, and to increase our internal cell production capacity from 420 MW to 700 MW by June 2010. We also intend to slightly increase our internal ingot and wafer capacity in 2010.

Under this expansion plan, we expect to produce approximately 450 MW to 500 MW of solar cells internally, while outsourcing approximately 200 MW to 250 MW from our long-term solar cell partners.

By achieving a higher ratio of internal cell production compared to external sourcing, we expect to sustain gross margins in the high teens and maintain a healthy net profit margin.

Dr. Shawn Qu, Chairman and CEO, remarked: “We believe that we have reasonable visibility for our 2010 forecast based on our channel checks. We expect to more than double our shipments in 2010 and are preparing our capacity expansion accordingly. This rapid growth is driven by our sales strategy of combining a superior product with attractive pricing and value added services. Furthermore, we intend to continue to aggressively develop new markets for our products. We were successful in our strategy in the U.S., South Korea and the Czech Republic this year, and have targeted other new markets such as Canada, Japan and China for 2010. We believe this strategic diversification will significantly reduce our exposure to the traditional solar markets such as Germany, Italy and Spain and allow us to build a solid foundation for continued growth and market share expansion.”

Investor Conference Call / Webcast Details

The dial-in number for the live audio call, which will begin today, Tuesday, November 17, 2009 at 8:00 a.m. U.S. Eastern Time (9:00 p.m. November 17, 2009 in Hong Kong), is +1-617-213-8059. The conference call passcode is 23659019. A live webcast of the conference call will also be available on our website at http://www.canadiansolar.com .

A replay of the call will be available approximately one hour after the conclusion of the live call through 12:00 p.m. on November 24, 2009, U.S. Eastern Time (1:00 a.m., November 25, 2009 in Hong Kong) by telephone at +1-617-801-6888. To access the replay, use passcode 19894949. A webcast replay will also be available at http://www.canadiansolar.com .

About Canadian Solar Inc. (NASDAQ: CSIQ)

Canadian Solar Inc. is a leading vertically integrated provider of ingot, wafer, solar cell, solar module and other solar applications. Canadian Solar designs, manufactures and delivers solar products and solar systems for on-grid and off-grid use to customers worldwide. Canadian Solar is one of the world’s largest solar module producers by manufacturing capacity. With operations in North America, Europe and Asia, Canadian Solar provides premium quality, cost-effective and environmentally-friendly solar solutions to support global sustainable development. For more information, visit http://www.canadiansolar.com .

Safe Harbor/Forward-Looking Statements:

Certain statements in this press release including statements regarding our expected future shipment volumes, gross and net margins, manufacturing capacities and cell conversion efficiencies, are forward-looking statements that involve a number of risks and uncertainties that could cause actual results to differ materially. These statements are made under the “Safe Harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by such terms as “believes,” “expects,” “anticipates,” “intends,” “estimates,” the negative of these terms, or other comparable terminology. Factors that could cause actual results to differ include general business and economic conditions and the state of the solar industry; governmental support for the deployment of solar power; future available supplies of high-purity silicon; demand for end-use products by consumers and inventory levels of such products in the supply chain; changes in demand from significant customers, including customers of our silicon materials sales; changes in demand from major markets such as Germany; changes in customer order patterns; changes in product mix; capacity utilization; level of competition; pricing pressure and declines in average selling prices; delays in new product introduction; continued success in technological innovations and delivery of products with the features customers demand; shortage in supply of materials or capacity requirements; availability of financing; exchange rate fluctuations; litigation and other risks as described in the Company’s SEC filings, including its annual report on Form 20-F originally filed on June 8, 2009, as amended by its report on Form 20-F/A filed on October 14, 2009. Although the Company believes that the expectations reflected in the forward looking statements are reasonable, it cannot guarantee future results, level of activity, performance, or achievements. You should not place undue reliance on these forward-looking statements. All information provided in this press release is as of today’s date, unless otherwise stated, and Canadian Solar undertakes no duty to update such information, except as required under applicable law.

Canadian Solar Inc.
Unaudited Condensed Consolidated Statements of Operations
(In Thousands of U.S. Dollars, Except Share And Per Share Data
And Unless Otherwise Stated)

Item 3Q 2009 2Q 2009 3Q 2008 2009 1-9 2008 1-9
Net revenues $213,126 $114,176 $252,362 $376,767 $636,183
Cost of
revenues 178,392 91,096 213,256 322,848 535,765
Gross profit 34,734 23,080 39,106 53,919 100,418
Selling
expenses 6,564 3,229 3,482 11,674 8,839
General and
administrative
expenses 7,327 6,410 9,267 18,255 21,178
Research and
development
expenses 964 530 603 1,963 1,352
Total
operating
expenses 14,855 10,169 13,352 31,892 31,369
Income from
operations 19,879 12,911 25,754 22,027 69,049
Interest
expenses (2,498) (1,913) (3,385) (6,665) (9,717)
Interest
income 756 2,849 819 4,168 979
Gain on debt
extinguishment — — — — 2,430
Debt
conversion
expenses — — — — (10,170)
Gain
(Loss) on
foreign
currency
derivatives (1,381) (1,050) 7,424 8,935 7,424
Exchange
gain
(loss) 9,665 6,038 (17,295) 12,827 (9,602)
Income before
taxes 26,421 18,835 13,317 41,292 50,393
Income tax (1,103) (1,163) (2,251) (3,086) (8,681)
Net income $25,318 $17,672 $11,066 $38,206 $41,712
Less: net
income
attributable
to non
controlling
interest (25) — — (25) –
Net income
attributable
to CSI
stockholders $25,343 $17,672 $11,066 $38,231 $41,712
Basic earnings
per share $0.71 $0.50 $0.32 $1.07 $1.39
Basic weighted
average
outstanding
shares 35,765,185 35,699,453 34,802,363 35,704,895 30,110,549
Diluted
earnings
per share $0.69 $0.49 $0.31 $1.06 $1.34
Diluted
weighted
average
outstanding
shares 36,571,071 36,141,329 35,630,794 36,126,760 31,197,198

Note: The third quarter 2008 net profit was decreased by $4,841 and the nine months to September 30, 2008 net profit was increased by $1.1 million, as compared to the third quarter 2008 and the nine months to September 30, 2008 net profit as per prior press release announcements due to retrospective application of FASB Staff Position-APB 14-1 on January 1, 2009.

With Enphase Energy’s launch of their micro-inverter product line back in 2007 and several new micro-inverter products being announced at Solar Power International 2009 in Anaheim, central inverters could become a thing of the past. Perhaps it’s too early to tell, but micro-inverters definitely open up the PV installation market to a whole new world of highly capable AC electricians who have previously steered away from PV because of the complexity of higher voltage DC systems that required specialized training and experience.

Micro inverters allow electricians from the HVAC industry and perhaps even the satellite cable installation industry to readily offer PV installation services without having to learn complex DC string sizing and site analysis. Further time savings and cost reduction measures, as well as reduction of micro-inverter technology itself, look to be on a more aggressive and innovative path than what traditional central inverters could ever offer.

And, of course, the next iteration of technology will be to remove the DC junction box altogether and integrate the micro-inverter technology onto the back of the module directly and offer PV-AC modules. That could make PV as easy as stringing up Christmas lights (Oh no! Stringing Christmas lights is never that easy!).

The state’s largest electric utility hopes to lower renewable energy credit payments.

Currently, a homeowner installs solar panels and receives a rebate of $2 per watt plus a renewable energy credit payment of $1.50 per watt.

Xcel Energy filed a plan to lower that credit payment by 50 cents once a half megawatt is added to the grid. Xcel spokesman Tom Henley said that would happen by the end of the year.

Xcel contends the company has given the solar industry in Colorado a jump start, paying out more than $105 million dollars to homeowners and businesses.

The Colorado Solar Industry Association supports the plan.

The plan will allow Xcel to meet the state’s renewable energy standard of 20 percent of retail energy sales, that is sales to customers, generated by renewable resources.

Today, the requirement is at 5 percent.

Xcel generates about 10 percent of its electric sales in Colorado from renewable sources, mostly wind.

“Wind typically enters the market competitively priced,” said Mark Stutz, Xcel spokesman.

But solar power is specified in the law that created the renewable energy standard.

For a utility Xcel’s size, 4 percent of renewable-sourced power must be from the sun by 2020.

To do that, Xcel submitted plans to add more than 257 megawatts of solar power to the grid through on site installations, businesses and homes with solar panels.

Xcel will also add 700 megawatts of wind and 350 megawatts of utility scale solar plants.

Amendment 37, passed in 2000, set a renewable energy standard for electric utilities. Solar Rewards started in 2006 to help Xcel meet the requirements.

Coal still fuels 57 percent of the electricity on Xcel’s grid, followed by 31.5 percent from natural gas. Wind is 9.8 percent and solar 0.05 percent, or 50 megawatts.

Hydroelectric generation is at 1.4 percent and is not considered part of the renewable standard, although State Rep. Frank McNulty, R-Highlands Ranch, put a failed bill forward to include it.

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