Solar module manufacturer Canadian Solar’s revenue for the first quarter (Q1) of 2025 dropped 10% year-over-year (YoY) to $1.19 billion, as module and battery energy storage system sales declined.

However, the figure still surpassed analysts’ expectations by $100 million.

The company recorded an adjusted net loss of $59.87 million in Q1 2025, a reversal from the $12.35 million net income reported in Q1 2024. The adjusted loss per share came in at $1.07, falling short of analyst forecasts by $0.04.

Operating expenses for the quarter decreased to $195.29 million from $203.68 million in Q1 2024. This reduction was mainly attributed to the absence of impairment charges and lower shipping and handling costs.

The company operates through two main segments. CSI Solar manufactures solar modules and battery energy storage products, while Recurrent Energy focuses on developing and operating utility-scale solar and battery storage projects.

CSI Solar’s total solar module shipments in Q1 2025 reached 6.9 GW, up 9% YoY but down 16% from the previous quarter. Of these, 413 MW were allocated to Canadian Solar’s utility-scale projects. The top five markets by shipment volume were China, the U.S., Pakistan, Spain, and Brazil.

Recurrent Energy had a global solar project development pipeline totaling approximately 27 GW and a battery energy storage development pipeline of 76 GWh as of March 31, 2025. The solar pipeline included 1.9 GW under construction, 4.5 GW in backlog, and 20.5 GW in various stages of development. The battery energy storage pipeline consisted of 9.8 GWh under construction or backlog and 65.9 GWh in early and advanced development.

The company’s battery storage division, e-STORAGE, reported a total turnkey project pipeline of over 91 GWh. This figure includes contracted and under-construction projects and those in negotiation. The division also managed over 5.0 GWh of operating battery storage systems under long-term service agreements, which stemmed from previous e-STORAGE projects.

CEO Shawn Qu acknowledged that Canadian Solar faces significant operational and financial challenges. He cited persistent structural overcapacity in the solar supply chain and global market downturns as key pressures impacting module pricing across most geographies. In addition to intense competition, evolving tariffs, and policy changes have increased costs and compressed margins.

To navigate these headwinds, Qu emphasized scaling back volumes in less profitable markets, deploying blended supply chain strategies, and bundling product offerings. He underscored the company’s focus on battery storage as a key differentiator and profit driver. He also reaffirmed disciplined cost control over operating and capital expenditures to protect profitability and cash flow.

Addressing the recently released draft of the Fair Energy and Opportunity Credit (FEOC) legislation by the House Ways and Means Committee, Qu believes the draft is far from its final form and anticipates substantial revisions during reconciliation. He noted the importance of both the FEOC and the Investment Tax Credit (ITC), explaining that any scale-back in the ITC would significantly impact developers and manufacturers alike.

According to internal estimates, a single year of ITC could translate into several hundred million dollars in value for Canadian Solar alone. Nonetheless, he pointed out that the ITC has a history of being extended under successive administrations, and the company remains prepared for possible phase-outs, having previously safe-harbored equipment during such transitions.

Canadian Solar’s investment activity in China is largely on hold pending further policy clarification at the provincial level. Qu anticipates a few months of adjustment but does not foresee a collapse in demand. While the second half of 2025 may remain weak, he expects a rebound in high-quality storage demand in 2026, driven by market liberalization under Policy 133. Qu explained that Canadian Solar evaluates whether to hold or sell projects upon reaching ready-to-build status based on available capital and project economics. The decision is tailored to each asset, constantly focusing on maximizing returns. Despite current uncertainties, he emphasized that the solar and storage markets in both the U.S. and Europe remain attractive and fundamentally strong.

Outlook

Looking ahead to the second quarter of 2025, Canadian Solar expects revenue to range between $1.9 billion and $2.1 billion, with gross margins anticipated to fall between 23% and 25%. CSI Solar’s module shipments recognized as revenue are projected to be between 7.5 GW and 8.0 GW, including approximately 500 MW destined for the company’s own projects. Battery energy storage shipments for the quarter are expected to be between 2.4 GWh and 2.6 GWh.

Qu acknowledged ongoing volatility in global pricing and uncertainties in regulatory frameworks, which have made margin visibility more difficult. As a result of shifting market and geopolitical developments, Canadian Solar has updated its full-year 2025 guidance.

The company now expects total module shipments between 25 GW and 30 GW, including around 1 GW directed toward internal projects. Battery energy storage shipments are forecasted at 7 GWh to 9 GWh, including approximately 1 GWh for internal use. The adjustment in module guidance reflects a strategic reduction in exposure to lower-margin markets, while the revision to storage shipments is mainly due to volumes in the U.S. affected by trade negotiations. Consequently, full-year revenue is projected to fall between $6.1 billion and $7.1 billion.