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A Closer Look at Canadian Solar’s Project Pipeline


May. 13 2016, Published 3:48 p.m. ET

Canadian Solar’s utility scale project pipeline

It’s important to know a company’s project pipeline in light of the recent extension of the ITC (investment tax credit) applicability period for solar projects. Projects that begin construction before 2020 will qualify for the maximum ITC of 30% under the latest Act.

Canadian Solar’s (CSIQ) existing project pipeline totals 13.5 GWp (gigawatt peak). Out of the 13.5 GWp capacity, 2.1 GWp are in late-stage development, and 11.4 GWp are in early- to mid-stage development. Solar modules are rated in watt peaks (Wp), according to international standards.

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Late-stage solar project pipeline

According to CSIQ’s filings, the estimated resale value of its late-stage projects exceeds $4.5 billion, with a gross profit contribution of more than $850 million. The majority of its late-stage projects are confined to the United States. The company’s utility-scale solar project pipeline in the United States amounts to 770.9 MWp (megawatt peak). The pipeline is expected to be commercially operational in 2016.

In Japan, the company’s utility-scale solar project pipeline totaled 600 MWp at the end of January 2016. Of the pipeline’s total capacity, CSIQ expects 42 MWp to be commercially operational in 2016 and 309 MWp to be commercially operational in 2017.

In addition, the company recently won a 63 MWp solar power project in Aguascalientes, Mexico, which it expects to develop, build, and connect to the grid by September 2018.

Early- to mid-stage solar project pipeline

Out of CSIQ’s 11.4 GWp early- to mid-stage project pipeline, about 3.4 GWp are being developed by Canadian Solar’s subsidiary Recurrent Energy. The company expects to develop these projects in the next five years and qualify for the ITC.

The recent extension in the ITC provides an incentive for upstream solar (TAN) companies such as First Solar (FSLR), SunEdison (SUNEQ), SunPower (SPWR), and Canadian Solar to commence their projects before 2020.

In the next and final part of this series, we’ll see what analysts are expecting from Canadian Solar’s future earnings.


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