Canadian Solar forms 600 MW photovoltaic cell plant joint venture

Toronto, Canada, June 1, 2011 Canadian Solar Inc. agreed with Suzhou New District Economic Development Group Corp. and Suzhou Science and Technology City Development Co., to build a 600 MW photovoltaic cell production factory in Suzhou, China.

The new factory, located about 8 kilometers from Canadian Solar's current solar cell production facility, will fully enable the company's 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 joint venture with SND and SST will allow the company to reach about 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 would like to reiterate 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 use 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.

Canadian Solar's 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.

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