Canadian Solar announces 600 MW PV cell plant JV

TORONTO, CANADA: Canadian Solar Inc. has signed an agreement with Suzhou New District Economic Development Group Corp. and Suzhou Science and Technology City Development Co. Ltd (SST) to build a 600 MW photovoltaic (PV) cell production factory in Suzhou, Jiangsu Province.

The new factory, located approximately 8 km from Canadian Solar's current solar cell production facility, will fully enable the Company's state-of-the-art, proprietary ELPS and ESE high-efficiency solar cells. Under the terms of the agreement, Canadian Solar will contribute 61 percent of the registered equity. Construction of the new factory is expected to start immediately after local permits are completed, with full ramp-up targeted for 2012.

The company remains on track to expand its annualized capacity for solar cells to 1.3 GW to 1.4 GW by mid-2011. This newly announced joint venture with SND and SST will allow the Company to reach approximately 2 GW of internal solar cell capacity during the first quarter of 2012. The company is also on track to reach 2 GW of annualized capacity for module lamination capacity by mid-2011. As a result, Canadian Solar expects to substantially achieve cell and module vertical integration by the end of the first quarter of 2012. Together with the joint venture agreement on solar wafer production announced with GCL as well as its existing long-term supply agreements and internal wafer capacity, the Company is on track to achieve a 2 GW 'virtual vertical integration' from wafer to cell and module at the beginning of 2012.

The company re-iterated that its internal cell and module capacities, which are 220 MW and 350 MW for the second quarter of 2011, respectively, are currently running at full utilization rates, reflecting the strong endorsement of Canadian Solar products in the marketplace. The percentage of third-party cells vs. internally produced cells in the second quarter of 2011 is expected to be higher than that in the first quarter of 2011 due to the full utilization of the company's module capacity. However, the Company still expects to maintain a similar or improved blended gross margin in the second quarter of 2011 compared to the first quarter of 2011 based on its trend forecast for third party cell and wafer prices.

Dr. Shawn Qu, chairman and CEO of Canadian Solar, said: "This is a major development for Canadian Solar, as we move toward more substantial wafer, cell and module vertical integration. By securing the support of partners Suzhou New District Economic Development Group and Suzhou Science and Technology City Development, we will be able to put the cell production capacity in place needed to meet higher customer demand levels, while doing so in a financial structure that is responsible to our existing shareholders. Importantly, the new facility will utilize our breakthrough ELPS high performance technology, as we focus on expanding our desired manufacturing capacity through improved cell efficiency, as well as other proprietary technology innovations to meet the growing demand for our high quality solar products."

Canadian Solar's powerful new ELPS solar cell technology is capable of boosting solar cell efficiency up to 19.5 percent monocrystalline and up to 18 percent for polycrystalline solar cells.