CSIQ’s Q3/2023 Revenues Drop With Lower ASPs

Solar PV modules manufacturer Canadian Solar has lowered its solar manufacturing targets after reporting 22% QoQ and 4% YoY decline in Q3/2023 net revenues, thanks to lower project sales and decline in average module ASP. These were partially offset by higher module shipment volume. 

Manufacturing plans adjusted 

Compared to the previously announced plans aiming for 50.4 GW, 60.0 GW, 70.0 GW and 80.0 GW ingot, wafer, cell and module manufacturing targets for December 2024 respectively, the management has now lowered the same (see CSIQ Meets Q2/2023 Shipment & Revenue Guidance). 

While ingot target remains unchanged, the manufacturer will now aim to grow its nameplate production capacity to 55 GW for wafers, 60 GW for cells and 61 GW for modules. 

In terms of technology, it is fast shifting to n-type TOPCon cell manufacturing. By 2023-end, it is expected to reach 60% of its total cell capacity. The company recently announced a 5 GW wafer fab in Thailand that will feed its 5 GW TOPCon cell factory in the US (see Canadian Company Expands Solar Manufacturing). 

It shipped 8.3 GW modules during the period reflecting 39% YoY and 1% QoQ increase. Of more than 70 countries these were shipped to, top 5 markets were China, the US, Brazil, Spain and Germany. 

Q3 gross profit of $308 million declined 30% QoQ and 15% YoY, while gross margin went down to 16.7% compared to 18.6% in the previous quarter. The company attributes it to lower margin contribution from project sales and lower module ASPs, partially offset by lower manufacturing costs.

The manufacturer continues to expand the share of n-type TOPCon cell technology in its manufacturing plans that it has revised down since Q2/2023. (Photo Credit: Canadian Solar Inc.)

President of Canadian Solar subsidiary CSI Solar, Yan Zhuang said, “CSI Solar’s gross and operating margins improved sequentially driven by lower manufacturing costs as we were able to achieve a higher level of vertical integration. This was notwithstanding TOPCon capacity ramp up costs incurred during the quarter, and further rapid declines in solar module prices, which led to an inventory write-down of modules in warehouses intended for certain distributed generation markets.” 

The manufacturer has high hopes from its e-storage business that had a contracted backlog of $2.6 billion at the end of Q3/2023, with $520 million worth of orders having come in since Q2/2023. By the end of 2024, it expects to have 20 GWh of capacity. 

Listed on the NASDAQ as CSIQ, its subsidiary Recurrent Energy had 26.5 GW worth of solar project development pipeline as of September 30, 2023, comprising 1.84 GW under construction and 5.99 GW in the backlog. For battery storage, the total pipeline of 54.54 GW comprised 4.57 GW in the backlog. 

“We expect e-STORAGE to remain one of our fastest growing businesses with improved profitability, as we anticipate to more than triple the shipments of our utility-scale energy storage solution next year and gain market share in the global energy storage segment,” said company Chairman and CEO Dr. Shawn Qu.  

Guidance 

For Q4/2023, the management guides for revenues of between $1.6 million and $1.8 billion, with a gross margin of 14% to 16%. It expects the total module shipments to fall within the range of 7.6 GW to 8.1 GW with around 95 MW for self-use. Total battery energy storage shipments are guided within 1.4 GWh to 1.5 GWh, with close to 720 MWh expected to generate revenues in early 2024. 

Full year 2023 module shipment guidance has been lowered to between 30.2 GW and 30.7 GW, but utility-scale storage guidance remains intact at 1.8 GWh to 2.0 GWh. Revenues are now expected within $7.5 billion to $7.7 billion, down from $8.5 billion to $9.0 billion. 

For full year 2024, module shipments are forecast within the range of 42 GW to 47 GW, and battery energy storage shipments within 6.0 GWh to 6.5 GWh.