Canadian Solar Inc. CSIQ recently announced its plan to build a solar photovoltaic (PV) wafer production facility in Chonburi, Thailand, with an annual output of 5 gigawatts (GW). Production in this facility is expected to start in March 2024. Post commencing full operation, this plan will help create a diversified supply chain for CSIQ’s customers in the United States.
Initially, this facility will supply wafers as inputs to the existing Thailand TOPCon cell manufacturing plant. From 2025 onward, the wafers will be supplied to the company’s Jeffersonville, IN-based 5 GW cell factory once it becomes fully operational.
Canadian Solar’s Prospects in the U.S. Solar Market
Canadian Solar is investing heftily in ramping up its manufacturing capacity to meet the nation’s rapidly growing solar demand.
As of Jun 30, 2023, in North America, CSIQ’s Recurrent Energy subsidiary had a 6,201 megawatt (MW) peak of advanced and early-stage pipeline projects. In October 2023, Canadian Solar announced the construction of a solar PV cell production facility at the River Ridge Commerce Center in Jeffersonville, IN.
The facility boasts an investment of $800 million and has a manufacturing capacity of nearly 20,000 high-power modules per day. The solar cells produced at this facility will be used at the previously announced 5 GW module assembly plant in Mesquite, TX, when operational.
Such investment strategies and development plans, including the latest one adopted by Canadian Solar, seem to be prudent, with the company aiming at tapping the benefits of the growing U.S. solar industry.
Growth Prospects & Peer Moves
Per the latest report from Mordor Intelligence, the U.S. solar energy market is estimated to be at 164.2 GW by the end of 2023. It is projected to reach 352 GW after five years, registering a compound annual growth rate (CAGR) of over 16.48% during 2023-2028.
Such growth opportunities should surely bolster CSIQ’s footprint in the U.S. solar market. Other solar players in the industry that are indulging in the expansion strategy to meet the growing demand in the United States are as follows:
SolarEdge SEDG plans to establish manufacturing capabilities in the United States by using contract manufacturers and establishing its manufacturing facility. In September 2023, the company announced the launch of its new high-power, three-phase SolarEdge 330 kilowatt inverter and its complementing H1300 Power Optimizer in the United States.
SEDG’s long-term (three- to five-year) earnings growth rate is 18.7%. The Zacks Consensus Estimate for 2023 sales implies a rise of 0.4% over 2022’s reported figure.
Enphase Energy ENPH is actively looking to expand manufacturing capacity in the United States. In third-quarter 2023, the company began shipment of microinverters from its third U.S. manufacturer Salcomp. During this period, ENPH shipped approximately 531,000 microinverters from its three U.S. contract manufacturers.
ENPH’s long-term earnings growth rate is 20.2%.The Zacks Consensus Estimate for 2023 sales implies a rise of 2.8% over 2022’s reported figure.
First Solar FSLR plans to expand and upgrade its Ohio Series 6 factories. Its new Alabama and Louisiana facilities are expected to commence operations in 2024 and 2026, respectively. These expansions will grow its manufacturing footprint to approximately 14 GW in the United States by 2026. In November 2023, FSLR signed an agreement to supply Swift Current Energy with 500 megawatts of advanced Series 7 thin film modules.
The Zacks Consensus Estimate for its 2023 sales implies a rise of 33.3% over 2022’s reported figure. The Zacks Consensus Estimate for earnings has moved up 8.9% in the past 60 days.
In the past year, shares of CSIQ have lost 41.8% compared with the industry’s 59.2% decline.
Image Source: Zacks Investment Research
Canadian Solar currently has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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