Canadian Solar 4Q24 Earnings Call March 25, 2025 Canadian Solar Inc. Safe Harbor Statement This presentation has been prepared by the Company solely to facilitate the understanding of the Company's business model and growth strategy. The information contained in this presentation has not been independently verified. No representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the ...

Core Insights - Canadian Solar Inc. reported financial results for Q4 and full year 2024, highlighting challenges in the solar industry due to competition and policy uncertainties, but noted stronger profitability in its modules business compared to the broader market [2][4][10] Financial Performance - Q4 2024 revenue was $1.5 billion, a 1% increase quarter-over-quarter but an 11% decrease year-over-year, primarily due to lower average selling prices of solar modules [4][10] - Gross profit for Q4 2024 was $217 million, with a gross margin of 14.3%, down from 16.4% in Q3 2024 but up from 12.5% in Q4 2023 [5][10] - Net income attributable to shareholders was $34 million, or $0.48 per diluted share, compared to a net loss of $14 million in Q3 2024 [10][11] Business Segments - The company operates through two segments: Recurrent Energy and CSI Solar, with Recurrent Energy focusing on project development and CSI Solar on manufacturing solar modules and energy storage solutions [14][27] - CSI Solar shipped 8.2 GW of solar modules in Q4 2024, with significant shipments to markets including China, the U.S., and Spain [3][27] - Recurrent Energy achieved a record 1.3 GWp of solar projects in commercial operation, despite project sales delays impacting overall performance [6][14] Energy Storage Focus - Energy storage solutions are becoming increasingly important, with a record 2.2 GWh of e-STORAGE shipments in Q4 2024 and a total pipeline of 79 GWh [6][30] - The company reported a contracted backlog of approximately $3.2 billion in energy storage projects, providing visibility into future revenue [30][31] Future Outlook - For Q1 2025, the company expects revenue between $1.0 billion and $1.2 billion, with gross margins projected between 9% and 11% [36][38] - For the full year 2025, total module shipments are expected to be between 30 GW and 35 GW, with total revenue projected between $7.3 billion and $8.3 billion [38][39]

Financial Performance - Canadian Solar Inc. is expected to report quarterly earnings of 11 cents per share for the first quarter, a significant improvement from a loss of 2 cents per share in the same period last year [1] - The company projects quarterly revenue of $1.57 billion, a decrease from $1.7 billion a year earlier [1] Recent Developments - On March 6, Canadian Solar secured Battery Supply Agreements and Long-Term Service Agreements for two major battery energy storage projects in the United States, developed by Aypa Power [2] - Following this announcement, Canadian Solar shares fell by 1.9%, closing at $9.96 [2] Analyst Ratings - Wells Fargo analyst Michael Blum maintained an Equal-Weight rating and reduced the price target from $13 to $10 [5] - GLJ Research analyst Gordon Johnson maintained a Sell rating and increased the price target from $9.1 to $12.28 [5] - UBS analyst Jon Windham maintained a Buy rating but lowered the price target from $38 to $35 [5] - The company has a Momentum score of 12.68 and a Value score of 85.28 according to Edge Stock Ratings [4]

Core Viewpoint - Canadian Solar Inc. has announced a significant partnership through its subsidiary e-STORAGE, signing a Battery Supply Agreement and Long-Term Service Agreement with Strata Clean Energy for a 100 MW / 576 MWh DC Battery Energy Storage System in Arizona, set to begin construction in October 2026 [1][2]. Group 1: Project Details - The White Tank Battery project will provide stored renewable energy to Arizona Public Service (APS), enhancing grid reliability [2]. - e-STORAGE will supply approximately 120 SolBank 3.0 battery enclosures to facilitate the shift of renewable energy production to meet evening demand [3]. - Following commissioning, e-STORAGE will manage the system under a 20-year LTSA, ensuring optimized performance and integration with APS's energy grid [3]. Group 2: Company Background - Canadian Solar is one of the largest solar technology and renewable energy companies globally, having delivered around 142 GW of solar photovoltaic modules since its founding in 2001 [5]. - The company has a contracted backlog of US$3.2 billion as of November 30, 2024, and has developed approximately 11 GWp of solar power projects and 3.7 GWh of battery energy storage projects globally [5]. - e-STORAGE operates two automated manufacturing facilities with an annual battery production capacity of 20 GWh, specializing in utility-scale battery energy storage systems [6]. Group 3: Strategic Importance - The partnership with Strata Clean Energy aligns with Arizona's clean energy goals, showcasing e-STORAGE's commitment to delivering high-performance energy storage solutions [4]. - Strata Clean Energy has extensive experience with over 180 projects in operation and focuses on delivering high-quality projects while maximizing cost-competitiveness [8].

Core Insights - Recurrent Energy has secured project financing and tax equity for the Fort Duncan Storage project, a 200 MWh energy storage facility in Texas, expected to be operational by Summer 2025 to meet ERCOT's peak power demand [1][2] Financing Details - The total financing for the project amounts to $112 million, which includes a construction and term loan, a tax equity bridge loan, and a letter of credit facility, led by Nord/LB [2] - Recurrent Energy has also entered into a $71 million tax equity partnership with Greenprint Capital [2] Project Impact - The Fort Duncan Storage project will enhance the reliability and resilience of the Texas grid, supporting economic growth and increasing demand for energy [3] - The project will operate on a merchant basis, capable of serving up to 66,100 households during a two-hour power dispatch cycle [3] Employment and Construction - The construction of Fort Duncan Storage is being carried out by Burns & McDonnell, employing 75 workers at peak construction [4] Company Background - Recurrent Energy, a subsidiary of Canadian Solar Inc., is a leading developer and operator of solar and energy storage projects, with a project development pipeline of over 27 GWp of solar and 68 GWh of energy storage capacity [5] - Canadian Solar Inc. is recognized as one of the largest solar technology companies globally, having delivered around 142 GW of solar photovoltaic modules and developed approximately 11 GWp of solar projects and 3.7 GWh of energy storage projects [8]

Core Viewpoint - Canadian Solar Inc. has secured significant battery supply and long-term service agreements for two major battery energy storage projects in the U.S., enhancing its position in the renewable energy sector [1][2]. Group 1: Project Details - The agreements involve a 160 MW AC/806 MWh DC Battery Energy Storage System in California and a 200 MW AC/998 MWh DC system in Texas [2]. - Approximately 370 SolBank 3.0 units will be deployed, with construction expected to start in Q3 2025 [2]. - e-STORAGE will manage system maintenance and operations under a 20-year long-term service agreement, ensuring long-term performance and reliability [2]. Group 2: Technology and Impact - The projects aim to strengthen grid resilience and support renewable energy integration in key U.S. markets [3]. - e-STORAGE will utilize its proprietary SolBank 3.0 battery energy storage solution, which features lithium-iron-phosphate technology, an active balancing battery management system, and advanced liquid cooling [3]. - The projects are expected to play a crucial role in stabilizing renewable energy supply and enhancing grid flexibility and reliability [4]. Group 3: Company Background - Canadian Solar is one of the largest solar technology and renewable energy companies globally, having delivered around 142 GW of solar photovoltaic modules since its founding in 2001 [5]. - The company has developed approximately 11 GWp of solar power projects and 3.7 GWh of battery energy storage projects globally [5]. - As of September 30, 2024, e-STORAGE has shipped over 8 GWh of battery energy storage solutions and has a contracted backlog of US$3.2 billion as of November 30, 2024 [5]. Group 4: Subsidiary and Partner Information - e-STORAGE specializes in designing, manufacturing, and integrating battery energy storage systems for utility-scale applications, with an annual production capacity of 20 GWh [6]. - Aypa Power, a partner in these projects, is a Blackstone portfolio company focused on developing utility-scale energy storage and hybrid renewable energy projects, with over 22 GW in development across North America [7].

Core Points - Canadian Solar Inc. has been recognized for its leadership in renewable energy, with its Founder, Chairman, and CEO, Dr. Shawn Qu, named an Innovator on the TIME100 Climate 2024 list [1][2] - The TIME100 Climate 2024 list honors 100 influential leaders for their measurable and scalable achievements in climate solutions [2] - Since its founding in 2001, Canadian Solar has delivered over 142 GW of solar modules and 8 GWh of battery energy storage solutions globally [3][6] - Canadian Solar was also named the World's Most Trustworthy Company in the Energy and Utilities sector by Newsweek, highlighting its commitment to transparency and sustainability [4] - Dr. Qu emphasized that Canadian Solar is a comprehensive energy solutions provider, integrating solar, lithium battery storage, and wind power to meet global energy demands [5] Company Overview - Canadian Solar is one of the largest solar technology and renewable energy companies, headquartered in Ontario, Canada [6] - The company has shipped over 8 GWh of battery energy storage solutions and has a contracted backlog of US$3.2 billion as of November 30, 2024 [6] - Canadian Solar has developed approximately 11 GWp of solar power projects and 3.7 GWh of battery energy storage projects globally since entering the project development business in 2010 [6] - The company's project development pipeline includes 26 GWp of solar and 66 GWh of battery energy storage capacity in various stages of development [6]

Company Overview - Canadian Solar Inc is a global leader in solar power and renewable energy solutions, founded in 2001 by Dr Shawn Qu in Guelph, Ontario [1] - The company has grown to around 20,000 employees with operations in more than 20 countries worldwide [1] - Canadian Solar is one of the world's largest solar technology and renewable energy companies, headquartered in Ontario, Canada [7] New Global Headquarters - Canadian Solar announced the opening of its new global headquarters in Kitchener, Ontario, which will serve as the corporate headquarters and house several subsidiary companies like e-STORAGE and module sales and services business units [2] - The new headquarters embodies the company's commitment to innovation, sustainability, and its Canadian heritage [2] - The Kitchener office will bring together talent from three global business units, reinforcing Canadian Solar's roots in Ontario and its leadership in the global energy transition [3][6] Industry Impact and Growth - Canadian Solar has successfully delivered around 142 GW of premium-quality solar photovoltaic modules to customers worldwide over the past 23 years [7] - Through its subsidiary e-STORAGE, the company has shipped over 8 GWh of battery energy storage solutions to global markets as of September 30, 2024, with a US$3.2 billion contracted backlog as of November 30, 2024 [8] - Since entering the project development business in 2010, Canadian Solar has developed, built, and connected approximately 11 GWp of solar power projects and 3.7 GWh of battery energy storage projects globally [8] - The company's geographically diversified project development pipeline includes 26 GWp of solar and 66 GWh of battery energy storage capacity in various stages of development [8] Local and Global Significance - The establishment of the new global headquarters in Kitchener highlights the strength of the region's innovation ecosystem and commitment to building a sustainable future [4] - Canadian Solar's expansion in Kitchener creates meaningful opportunities for local talent, economic growth, and leadership in clean energy solutions [4] - The company's mission to power the world with solar energy will help create a cleaner Earth for future generations, reinforcing its role in advancing renewable energy on a global scale [3][4] Leadership and Vision - Dr Shawn Qu, Chairman and CEO of Canadian Solar, emphasized the company's commitment to sustainability and innovation, continuing to provide clean energy solutions worldwide from Ontario [3] - Colin Parkin, President of e-STORAGE, highlighted the new office as a hub for fostering collaboration and driving innovation in energy storage solutions [6] - Thomas Koerner, Corporate Senior Vice President, stated that the new headquarters aligns the company's vision with its roots, reinforcing its leadership in the global energy transition [6]

Core Viewpoint - Canadian Solar Inc. (CSIQ) has signed contracts with Copenhagen Infrastructure Partners (CIP) to supply 2 GWh of battery energy storage systems for projects in Scotland, with construction set to begin in 2027 [1][2]. Group 1: Company Developments - The 2 GWh capacity from the projects will power nearly 250,000 homes and displace approximately 4.57 million metric tons of CO2 emissions during their lifespan [2]. - CSIQ is expanding its footprint in Europe, as evidenced by the recent contracts with CIP and a previous announcement to supply 11 megawatt alternating current / 22 megawatt-hours battery energy storage solutions for Root-Power's Coryton project in the UK [4]. Group 2: Industry Trends - The energy storage market in Europe is projected to grow at a CAGR of 20.7% from 2024 to 2029, driven by the increasing adoption of clean energy [4]. - Other solar companies, such as Enphase Energy, SolarEdge Technologies, and Emeren Group, are also expanding in Europe to capitalize on the growing battery storage market [5]. Group 3: Competitor Insights - Enphase Energy is expanding its presence in Europe with strategic partnerships and product launches, including the IQ Battery 5P in Belgium and France, and has a long-term earnings growth rate of 3.6% [6]. - SolarEdge Technologies launched its first commercial storage system, the CSS-OD battery, in Germany, with a long-term earnings growth rate of 1.2% [7]. - Emeren Group closed the second round of its BESS portfolio in Sicily, Italy, with a combined capacity of 162 MW or around 1.4 GWh, and has a Zacks Consensus Estimate for 2025 sales indicating a 46.4% improvement from 2024 [8][9].

Core Insights - Canadian Solar Inc. announced contracts for the delivery of 2 GWh DC of battery energy storage systems for two projects in Scotland, Coalburn 2 and Devilla, scheduled to start construction in 2027 [1][2] Group 1: Project Details - The Coalburn 2 Project will have a capacity of 1 GWh DC and is located in South Lanarkshire, while the Devilla Project will also have a capacity of 1 GWh DC and is situated in Fife [1] - Each project site will feature a two-hour energy storage dispatch capability [1] - The combined 2 GWh capacity will provide enough energy to power approximately 250,000 homes for a full day based on average UK electricity consumption [2] Group 2: Environmental Impact - Coalburn 2 and Devilla are expected to collectively displace approximately 4.57 million metric tons of CO2 emissions during their lifespan [3] - The projects will support the efficient transmission of renewable energy, enhance offshore wind generation, and include environmental measures such as tree planting and habitat creation [3] Group 3: Company and Subsidiary Information - e-STORAGE, a subsidiary of Canadian Solar, will supply and integrate around 450 SolBank 3.0 battery containers for the projects and will manage long-term facility performance under a service agreement with Copenhagen Infrastructure Partners [2][4] - Canadian Solar has delivered around 142 GW of solar photovoltaic modules globally and has a contracted backlog of US$3.2 billion as of November 30, 2024 [5] - e-STORAGE operates two manufacturing facilities with an annual battery production capacity of 20 GWh [6] Group 4: Investment and Market Position - Copenhagen Infrastructure Partners (CIP) is investing in these projects as part of its strategy to support the UK's clean power system and aims for a net zero carbon economy by 2050 [4][7] - CIP manages over 30 GW of renewable energy infrastructure in the UK, representing more than £15 billion of future investment potential [7]