Solar Power International, Las Vegas September 14, 2016
CSIQ NASDAQ Listed
GLOBAL SOLAR OUTLOOK Dr. Shawn Qu Charmain and CEO
2 Canadian Solar Inc.
Company Overview! Founded in Ontario, 2001 ! Listed on NASDAQ (CSIQ) in 2006 ! Over 8,000 employees globally ! Presence in 18 countries / territories ! > 16 GW of solar modules shipped
cumulatively ! > 1.8 GWp solar power plants developed,
built and connected (incl. Recurrent) ! Top 2 solar company by MW shipped,
revenue and profits in 2015
Global Footprint and Brand
Salesoffice Manufacturingfacility TotalSolu4onscontracted/latestageprojects
Highlights
! 2015 Revenue: $3.5 Billion ! 2015 Shipments: 4.7 GW ! 2015 Net Income: $172 Million ! 2016 Shipment Guidance: 5.4 – 5.5 GW
Solar Power Plants Built and Connected
80.5261.8
628.1
1,196.1
2011-12 2013 2014 2015
3 Canadian Solar Inc.
Macro Factors: Long Rates Trending Lower
-2
0
2
4
6
8
10
'93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16
%
Interest Rates since 1993
USD
Euro
JPY
FedFundRate
Lower interests rates reduce the cost of solar financing & the yield expectation of investors, leading to reduced capital costs of solar assets and a positive climate for solar developers
Source:Bloomberg,CanadianSolarAnalysis
4 Canadian Solar Inc.
Macro Factors: Energy Prices have Bottomed
0
20
40
60
80
100
120
140
160
'90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16
CrudeOilFuturessince1990
WTIBrent
200
250
300
350
400
450
500
550
600
'90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16
1,000,000Ba
rrels
DOECrudeOilTotalInventorysince1990
0
2
4
6
8
10
12
14
16
18
'90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16
NaturalGasFuturessince1990
65
67
69
71
73
75
77
79
81
83
'01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15
1,000,000Ba
rrels
DOEWorldCrudeOilProducIonsince2001
As base energy prices stabilize, resulting in boosted sentiment of energy investors
Source:Bloomberg,CanadianSolarAnalysis
5 Canadian Solar Inc.
Emerging
Mature China 27%
Japan 20%
U.S. 14%
Europe 13%
India 7%
MEA 6%
Latin America
6%
Others 7%
Global Opportunities ! Mature markets: grid-parity and evolving storage solutions will drive growth of distributed
generation and self consumption
! Emerging markets: utility-scale business and hybrid micro-grids will drive growth and create high margin opportunities for IPPs
Source:IHS,CanadianSolarAnalysis
163.1 GW 51%
154.3 GW 49%
Japan U.S. Mature Europe
China Emerging Europe
India
Global PV Demand in Regional Markets 2015-19: 317 GW
6 Canadian Solar Inc.
Decreasing Manufacturing Costs
Q2 2011 $0.76/W
Polysilicon/Wafer
$0.23/W
Cell
$0.33/W
Module
$1.32/W1
Total
Q2 2016 $0.18/W $0.08/W $0.13/W $0.39/W1
$0.11/W $0.06/W $0.12/W $0.29/W2
Source: Company information
1. Blended manufacturing cost in China 2. Based on internal ingot, wafer, cell and module manufacturing in China
Q4 2020 $0.09/W $0.06/W $0.10/W $0.25/W2
• Lower polysilicon cost • Lower polysilicon usage
leveraging diamond wiresaw
• Decrease raw material usage and purchase costs
• Increase throughput
• Higher efficiency • Reduce bill of material
(BOM) cost
Q4 2017
7 Canadian Solar Inc.
Solar Modules Increasingly Efficient and Powerful
Technological Innovations:
! CSI’s Black Si nano-texturing technology paves the way for diamond-wire sawing in multi-crystalline wafer production.
! Black Si will be the industry’s mainstream technology by ~2018.
! Mono PERC cell mass production efficiency projected to be above 22.5% by 2020.
! Design and process innovations will enable 72-cell module wattage to exceed 390W by 2020, resulting in a significant reduction in LCOE.
Technological innovations will lead to increasingly powerful and efficient solar modules, meaning more green power with the same footprint and infrastructure
60-CellModule
72-CellModule
8 Canadian Solar Inc.
US Solar Outlook
! U.S market since Q1 2015:
! 51% of all new electric generating capacity in U.S. came from solar
! The residential and utility PV market segments each added more capacity than the natural gas industry brought on-line
! Nearly 209K Americans work in the solar, with that number projected to double by 2020.
! Solar installation costs have dropped by more than 70%
! Policy challenges
! Net metering challenge in several states including Nevada and Arizona
! The AD/CVD trade barrier raises the module price >30%
! Trade barrier makes conducting business difficult and hurt US jobs
The economics for US solar are ideal; the problems currently facing the US solar industry are all policy-related
9 Canadian Solar Inc.
THANK YOU!
September 2016