Canadian Solar's Q4 2024: Key Contradictions in Energy Storage Margins, Module Pricing, and U.S. Demand

These are the key contradictions discussed in Canadian Solar's latest 2024Q4 earnings call, specifically including: Energy Storage Margins, Module Pricing Trends, U.S. Module Pricing, and US Market Demand:



Solar Market Challenges and Energy Storage Growth:
- Canadian Solar reported 8.2 gigawatts of solar module shipments in Q4 2024, with a total volume of 31.1 gigawatts for the year.
- Despite the significant volume, the company's total revenue in 2024 was US$6 billion due to declining global module pricing, lighter project sales, and other factors.
- The growth in energy storage, with 2.2 gigawatt hours shipped in Q4 and 6.6 gigawatt hours for the year, is attributed to increasing demand for diversified energy storage solutions.

Financial Performance and Impairments:
- Canadian Solar's net income for the year was US$34 million, impacted by $132 million in positive effects from hypothetical liquidation accounting.
- Gross margin was affected by several factors, including 950 basis points reduction due to impairments, trade-related duties, and project asset impairments.
- The company incurred $65 million in impairments for manufacturing assets and $54 million on project assets and solar power systems.

Manufacturing and Capacity Expansion in the US:
- Canadian Solar is expanding its US manufacturing capabilities with a module factory expected to ramp up in 2025 in Mesquite, Texas, contributing 3 gigawatts of volume.
- The company is also progressing with a solar cell facility, which has begun civil works and plans to install manufacturing equipment later in the year.
- These expansions aim to increase local production, supporting Canadian Solar's ability to operate in closed markets and adapt to US market demands.

China Policy Changes and Market Dynamics:
- China is experiencing a surge in solar installations due to policy changes effective April 30 and May 31, 2025.
- These policy shifts have led to an increase in solar module price in China, which is impacting the global market dynamics.
- Despite the challenges, Canadian Solar plans to capitalize on the global demand for energy storage solutions, anticipating growth in distributed storage and smaller point-of-use systems.