Canadian Solar Inc. Braces For Rise In Global Demand For Solar Energy Panels

Guelph, Ontario-based solar manufacturer predicts a possible shortage of solar panels in later this year.

Canadian Solar Inc. (NYSE:CSIQ) is not surprised from Thomas Timmins, a lawyer at Gowlings in Toronto, stating that the global solar panels shortage may possibly happen later this year. It has reached a threshold and the shortage will likely become mainstream throughout the world.

There is some ‘meat’ in that statement. Solar prices have fallen by more than half for the last several years and correspondingly, this has driven up demand, as the public and governments around the world become more highly conscious about the prospect of global warming, conventional oil and gas field see a decline in production, coupled with unconventional fields being difficult to extract and costly to produce.

Shawn Qu, CEO of Canadian Solar Inc., gave an example of Rainy River First Nation Solar Power System Project, 250 km southwest of Winnipeg, where there is an extraordinary growth of the solar industry in Canada, pointing out that it took 800 transport trucks to carry those panels for the $100 million project.

Initiatives by the Canadian government, such as the Large Renewable Procurement, run by the Independent Electricity System Operator, which is operated by the Ontario government, a strong advocate of clean energy, has provided a level playing field for companies, such as Canadian Solar, bid for renewable energy projects.

Likewise, U.S.-based Rocky Mountain Institute has warned U.S Northeast utilities to brace themselves with the prospect of consumers planning to install solar and battery storage systems to generate more power themselves, as they stand to lose just as much market share through residential sales.

To this end, Canadian Solar Inc. is planning to double its own panel capacity from its 2013 levels. Before that, the company faces overcapacity in 2012, but now that gap is just about to be closed. Half of the company’s sales were in Canada alone. With the US, China, and Japan being its other core markets.

The company earned a record less than $240 million on the back of less than $3 billion worth of sales and shipments. The outlook for this year suggests a less than 40% increase in sales worth 4.3 gigawatts panels. Canaccord Genuity also holds similar bullish forecast for the organization, pointing to the positive sentiment that has returned to the solar group.

To help keep up with its expansion, the company has recently secured a $265 million purchase of the San Francisco-based developer, Recurrent Energy, from Sharp Corp. in March, a deal that will help it to expand the power project pipeline to less than 9 gigawatts.

Canadian Solar stock price ended the day at $37, a decline of more than 1.50%.