Canadian Solar notes challenges to UMG suppliers as polysilicon prices fall

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on reddit
Reddit
Share on email
Email

Canadian Solar executives said during a conference call to discuss 4Q and year-end financial results that polysilicon prices had fallen to between US$110 per kg and US$130 per kg. This had enabled the module manufacturer to renegotiate UMG silicon feedstock prices to approximately US$60 per kg, maintaining a US$50 per kg margin between the two feedstocks. Canadian Solar uses UMG silicon in its ‘e-modules’ and has already secured contracts for these lower (15%) priced modules in 2009, equating to 120MW.

The challenge for UMG suppliers, acknowledged by Dr. Shawn Qu, Chairman and CEO of Canadian Solar during questioning by financial analysts, is that he expects polysilicon prices to drop to approximately US$70 per kg, pushing UMG pricing to between US$15 per kg and US$20 per kg by the end of 2009.

At the recent Photon Technology Show, held in Munich, Germany at the beginning of March, 2009, Photon Consulting market researchers, noted that the significant increase in polysilicon and lower than anticipated demand due to project finance constraints amongst others could see prices fall to as much US$30 per kg.

Although the supply chain dynamics have become complex and highly changeable, financial analysts were concerned in the conference call that should polysilicon prices fall to US$50 per kg or below, UMG’s cost advantages could simply evaporate, destroying the UMG market in its path.

Dr Ou countered this line of argument to some extent, noting that Canadian Solar was working closely with its two UMG suppliers to improve the quality of the material to boost conversion efficiencies of cells as well as internal efforts that had already seen over 1% efficiency improvements in the last year.

Dr Ou also noted that cell efficiencies using UMG silicon had reached 14.7% in 2008, up from 13.3% in 2007, with a clear roadmap to take efficiencies up to 15.5%, though no timeline was given.

“We expect to achieve wafer to module processing costs of $0.60 per watt and polysilicon to module processing costs of $0.90 per watt by the end of Q2 2009,” noted Dr Ou.

Capacity Ramp

Canadian Solar also said in the conference call that it had reached an ingot capacity of between 120MW – 150MW in 2008, a cell capacity of 270MW, which was primarily dedicated to UMG cell based production and 620MW capacity for solar modules, including e-modules.

Based strictly on market demand and improvements in credit facilities the company could potentially add a further 100MW of ingot capacity in 2009 as well as 150MW in cell capacity.

However, citing poor visibility and a halt to capital spending put in place in the fourth quarter, the company did not give guidance as to when further expansions may take place.

Canadian Solar hit by slowdown

Canadian Solar reported lower than expected fourth quarter and full year results, due to weaker demand for PV modules resulting in module price declines and inventory write-downs. 4Q08 revenue was US$73.0 million, compared 3Q08 net revenues of US$252.4 million. Full year 2008 net revenues reached US$709.2 million, a 134% increase over full year 2007 net revenues of $302.8 million.

4Q08 shipments were 19.6MW, bringing full year 2008 shipments to 167.5MW, a 100% increase over full year 2007 shipments of 83.4MW.

However, the net loss for the quarter was US$50.6 million, which included a $23.3 million write-down for inventory as a result of the rapid decline in the market price and value of feedstock, work-in-progress and finished solar modules.

Canadian Solar did not provide first quarter guidance but gave a wide range financial forecast for 2009. The company currently expects net revenue to be between US$600 million and US$800 million on shipments of between 300MW to 350MW.

 

28 July 2021
LONGi has launched its Hi-MO N module, the company's first bifacial module with N-type TOPCon cells, designed to deliver ultra- high value and lower LCOE to utility-scale PV power plants. This PV TechTalk Product Series webinar will provide an overview of the module’s technology and how the introduction of n-type technologies will provide efficiency and performance gains for solar project developers.
29 July 2021
This free webinar will explore the ongoing opportunities in the UK solar PV market, looking at global technology trends and how they apply to the UK. Join us for an overview of the project pipeline and forecast for deployment over the coming years. We'll be looking at the types of modules available and being used in the UK and presenting a case study on the deployment of bifacial modules in this market.
19 August 2021
The utility-scale PV market is poised for exponential growth and yet the industry still has many fundamental opportunities to improve on standards and best practice. Tracker shade loss has been one of those topics that deserve more attention, but has been typically handled by derate factors rather than trying to accurately forecast the loss over the life of the system. Join Nextracker’s subject matter experts, Aron Dobos and Neelesh Umachandran, and Rounak Kharait, director of solar energy assessments at DNV, for a webinar about why shade modeling matters and recommendations on what the solar industry should do about it.
25 August 2021
Energy Next is a new industry exhibition focusing on the latest renewable energy and energy efficiency technology, which will be held for the first time in 2021 in Sydney, Australia alongside the Clean Energy Council’s Australian Clean Energy Summit, the peak gathering of leaders driving Australia's energy transformation. Organised by the same people behind Australia’s largest clean energy event, All-Energy Australia, Energy Next will give visitors two days of access to key suppliers in the industry, free-to-attend professional development and industry workshops, and networking opportunities to better understand clean energy issues and solutions and learn about the latest developments in this transformational, dynamic sector.
25 August 2021
The Intersolar Summit Brasil Nordeste takes place in Fortaleza, Brazil. It addresses leading local and international experts on solar power and renewable energy in the region. The Summit’s mission is to provide in-depth education, enable high-quality networking opportunities, expand the use of PV technologies at regional and national level and strengthen the local PV industry. The Intersolar Summit Brasil Nordeste is organized by Intersolar South America - Latin America’s largest exhibition and conference for the solar industry: Solar Promotion International GmbH, Pforzheim, Freiburg Management and Marketing International GmbH (FMMI) and Aranda Eventos & Congressos Ltda, São Paulo as co-organizer.
25 August 2021
Join us to hear directly from the CTOs and heads-of-research from the top-20 cell/wafer producers to the PV industry today. The event will focus on predicting the key metrics underpinning the next big shift to n-type with answers to the key questions: When will the transition to n-type happen? Which companies will be first to 10 GW capacity and production? Who will be the key equipment suppliers for the new production lines? Which n-type process flow/architecture will emerge as the front-runner? What will polysilicon purity and wafer thickness levels look like for optimized n-type manufacturing? What will the upstream poly/wafer supply-chain look like in 5 years from now?

Read Next

July 27, 2021
Greek industrial group Mytilineos recorded a net profit of €77 million (US$91 million) in H1 2021, however the firm’s renewables division witnessed a drop in revenue year-on-year.
July 27, 2021
Canadian Solar has closed a BRL500 million (US$100 million) financing facility to develop a Brazilian solar portfolio claimed to be the country’s largest, while also giving it the option to hold built solar assets for longer.
July 27, 2021
Community Choice Aggregators (CCA) Central Coast Community Energy (CCCE) and Silicon Valley Clean Energy (SVCE) have signed contracts for 778MW of renewable energy generation and 118.75MW of energy storage in California.
July 27, 2021
More than 140 business leaders have urged the US Congress to pass President Joe Biden’s bipartisan infrastructure bill, telling lawmakers that the bill is “desperately needed” to renew the nation’s infrastructure
July 27, 2021
A round-up of the latest news from the US solar market, featuring Vision Solar’s commitment to hire “hundreds” of sales staff as part of a two-state expansion, Recurrent Energy’s sale of two major assets in Texas and news of 8minute Solar Energy strengthening its legal team.
July 27, 2021
Tesla reported retrofit solar installations of 85MW in Q2 2021, cementing its recovery from a worst-ever performance in the corresponding period last year.

Subscribe to Newsletter

Upcoming Events

Solar Media Events, Upcoming Webinars
July 29, 2021
Webinar
Upcoming Webinars
August 19, 2021
At 9am (PT) | 6pm (CEST)
Solar Media Events
August 25, 2021