Canadian Solar, a leading global provider of solar energy solutions, announced a 22 percent quarter-on-quarter (qoq) and 4 percent year-on-year (yoy) decrease in net revenues for the third quarter of 2023, totaling $1.8 billion.
This decline was primarily attributed to reduced project sales during the quarter and a drop in the average selling price (ASP) of solar modules. However, the company saw a surge in solar module shipment volumes, which partially offset these declines.
During the third quarter, Canadian Solar recorded 8.3 GW of module shipments, marking a substantial 39 percent increase yoy and a marginal 1 percent rise qoq. Notably, 82 MW of these shipments were directed towards the company’s utility-scale solar power projects.
Despite the robust shipment volumes, the company reported a gross profit of $308 million for Q3 2023, down by 30 percent qoq and 15 percent yoy. The gross margin stood at 16.7 percent, compared to 18.6 percent in the preceding quarter, primarily affected by lower margin contributions from project sales and reduced module ASPs, partially offset by decreased manufacturing costs.
Total operating expenses amounted to $225 million in Q3 2023, showing an increase from the previous quarter, driven by higher transportation costs, TOPCon production ramp-ups, and research and development (R&D) investments. However, this increase was partly mitigated by a reduction in share-based compensation following the successful CSI Solar IPO in Q2 2023.
Recurrent Energy, now under the umbrella of Canadian Solar’s segment, exhibited a robust pipeline as of September 30, 2023, boasting a global solar development pipeline of 26 GWp and an energy storage pipeline of 55 GWh. The solar project development pipeline comprised 26.5 GWp, with 1.8 GWp under construction, 6.0 GWp in backlog, and 18.7 GWp in advanced and early-stage pipelines.
Looking ahead, Canadian Solar anticipates fourth-quarter revenues in the range of $1.6 billion to $1.8 billion, with a gross margin forecasted between 14 percent and 16 percent. They project module shipments to range between 7.6 GW and 8.1 GW, including a portion to be allocated to the company’s own projects. Additionally, the company expects significant battery energy storage shipments in the range of 1.4 GWh to 1.5 GWh, a portion of which will contribute to revenues in early 2024.
For the full year of 2024, Canadian Solar sets ambitious expectations, forecasting total module shipments between 42 GW and 47 GW and total battery energy storage shipments between 6.0 GWh and 6.5 GWh, including allocations to the company’s internal projects, underscoring their confidence in sustained growth and expansion within the renewable energy sector.