Full Description

Canadian Solar Inc. (CSI), incorporated in October 2001, designs, develops, manufactures and sells solar cell and module products that convert sunlight into electricity for a variety of uses. The Company conducts all of its manufacturing operations in China. The Company’s products include a range of standard solar modules built to general specifications for use in a range of residential, commercial and industrial solar power generation systems. It also designs and produces specialty solar modules and products based on its customers’ requirements. Specialty solar modules and products consist of customized modules that its customers incorporate into their own products, such as solar-powered bus stop lighting, and complete specialty products, such as solar-powered car battery chargers. It sells its products under its Canadian Solar brand name and to original equipment manufacturing (OEM) customers under their brand names. It also implements solar power development projects, primarily in conjunction with government organizations to provide solar power generation in rural areas of China.

The Company sells its products to customers located in various markets worldwide, including Germany, Spain, France, the Czech Republic, Italy, Korea, Canada and China. It sells its solar modules to distributors and system integrators, and into solar projects. It sells its specialty solar modules and products directly to various manufacturers who integrate the specialty solar modules into their own products and sell and market the specialty solar products as part of their product portfolio. CSI has expanded its in-house manufacturing capacity for ingot, wafer, solar cells and solar modules, with an annual capacity of 270 megawatts of solar cells during the year ended December 31, 2008. Its ingot capacity as of December 31, 2008, was 120 to 150 megawatts. As of January 1, 2009, it had 620 megawatts of combined annual solar module manufacturing capacity at its Suzhou, Changshu and Luoyang facilities in China. In March 2008, the Company commenced commercial production of e-Modules, which is a medium power solar module product using upgraded metallurgical grade silicon material (UMgSi). Its e-Module average conversion efficiency is approximately 15%. The Company sold 166.5 megawatts of its solar module products in 2008.

Standard Solar Modules

CSI’s standard solar modules are an array of interconnected solar cells encased in a weatherproof frame. The Company produces a variety of standard solar modules, ranging from 0.2 watts to 300 watts in power, and using multi-crystalline and mono-crystalline and UMgSi solar cells. These products are built to general specifications for a range of residential, commercial and industrial solar power generation systems. Its standard solar modules are designed to be durable under harsh weather conditions. The Company primarily sells its standard solar modules under its brand name and to OEM customers under their brand names.

Specialty Solar Modules and Products

CSI collaborates with its customers to design and manufacture specialty solar modules and products based on its customers’ specifications and requirements. Its specialty solar modules and products consist of customized solar modules and specialty products. The Company’s customized solar modules are solar modules that CSI designs and manufactures for customers who incorporate its customized solar modules as a component of their own products. CSI has manufactured a customized array of six solar modules assembled onto a curved canopy for a customer who incorporated it into its bus stop shelter products. The Company designs and manufactures specialty products, which combine its solar modules with various electronic components that CSI purchases from third-party suppliers. In addition to battery chargers, small solar charging panels, which are incorporated into solar garden light products, and solar street lights, the Company has also produced security sensors, signaling systems and mobile phone chargers.

The Company’s specialty solar modules and products have been used primarily in the automotive city infrastructure and outdoor lighting sectors. CSI focuses on these and other industries, such as the telecommunications sectors, which have off-grid applications that can be powered by solar power.

Solar Cells

As of December 31, 2008, CSI has internal solar cell manufacturing capacity of 270 megawatts. Its solar cells are made on both mono-crystalline and multi-crystalline silicon wafers through multiple manufacturing steps, including surface texturization, diffusion, plasma-enhanced chemical vapor deposition and surface metallization.

Solar Power Development Projects

The Company implements solar power development projects, primarily in conjunction with government organizations, to provide solar power generation in rural areas of China. In conjunction with the Canadian International Development Agency (CIDA), CSI implemented a Solar Electrification for Western China project between the years ended December 31, 2002, and June 2005. As part of this project, the Company installed many demonstration projects and conducted three solar power forums in Beijing, Xining and Suzhou. During 2008, the Company reached an agreement with the Suzhou New District government in Suzhou to begin construction of a PV theme park. In 2009, CSI completed the installation of a BIPV solar wall in its office building in Luoyang.

The Company competes with SunPower Corporation, First Solar, Inc., BP Solar International Inc., Sharp Solar Corporation, Renewable Energy Corporation, Suntech Power Holdings Co., Ltd., Yingli Green Energy Holding Company Limited and Trina Solar Limited.