Canadian Solar Subsidiary CSI Solar To Transfer US Assets To Parent Firm To Derisk

CSI Solar, a 75% owned subsidiary of Ontario, Canada based Canadian Solar, will set up two joint ventures with Canadian Solar: one for its US solar business and one for its US energy storage business. CSI Solar, established in 2009 in China as a subsidiary by Canadian solar, is based in Suzhou, China. The corporate restructuring follows stringent pushbacks against Chinese owned firms in the US market. 

Canadian Solar will own 75.1 percent of each JV, which will run the solar manufacturing assets through a leasing model. For Canadian Solar, founded by Chinese origin Dr. Shawn Qu, the perception battle has been an ongoing effort, with many assuming that the firm is a Chinese firm, when it is clearly not.  The latest move goes further to derisk the firm's operations from action against Chinese owned firms in the US. 

The three facilities to be part of the JV are a solar wafer plant, a battery factory, and an energy storage manufacturing site that is still under construction.

The China listed CSI will receive a one-time payment of CNY352 million (USD49.8 million) based on an asset valuation of CNY469 million. Post deal, CSI will focus on non-US markets exclusively.

CSI also plans to provide Canadian Solar with a counter-guarantee limit of upto  CNY44.6 billion (USD6.3 billion) to support the latter in providing performance and financing guarantees for CSI and its holding subsidiaries. CSI was listed on the Shanghai stock exchange in 2023, at the height of the boom in solar stocks in China, which has subsequently ebbed after the downturn caused by over capacity and low prices.  

CSI's history in the US market is quite interesting in itself, as it  entered the US market in 2015 by acquiring local PV power plant developer Recurrent Energy. It invested USD250 million to build a 5-gigawatt panel factory in Texas in 2023, which started production that year. In 2023, the firm has also announced plans to build a 5 GW battery factory in Indiana, with plans to start output this year, in a move driven by the tax credit under the previous  Biden administration. Plans for an energy storage battery factory in Kentucky followed last year as the storage market exploded.