Solar module manufacturer Canadian Solar’s revenue for the second quarter (Q2) of 2025 rose 4% year-over-year (YoY) to $1.69 billion, due to higher sales of battery energy storage systems and solar modules.

However, the revenue fell short of analyst expectations by $201.27 million.

The company recorded an adjusted net loss of $23.05 million in Q2 2025, a reversal from the $3.82 million net income reported in Q2 2024. The adjusted loss per share came in at $0.53, falling short of analyst forecasts by $0.34.

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 Q2 2025 reached 7.9 GW, down 4% year-over-year. Of these, 672 MW were allocated to Canadian Solar’s utility-scale projects. The top five markets by shipment volume were the U.S., China, Pakistan, Spain, and Australia.

Recurrent Energy had a global solar project development pipeline totaling approximately 27.3 GW and a battery energy storage development pipeline of 80.2 GWh as of June 30, 2025. The solar pipeline included 2 GW under construction, 4.2 GW in backlog, and 21.1 GW in various stages of development. The battery energy storage pipeline consisted of 6.4 GWh under construction or backlog and 73.8 GWh in early and advanced development.

The company’s battery storage division, e-STORAGE, reported a contracted backlog of $3 billion, including long-term service agreements, providing multi-year revenue visibility. As of June 30, 2025, e-STORAGE had manufacturing capacity of 10 GWh for SolBank systems and 3 GWh for battery cells, with plans to expand to 24 GWh and 9 GWh, respectively, by the end of 2026.

CEO Xiaohua Qu noted that on the supply side, domestic onshoring for solar and storage is becoming more difficult due to increasingly strict Foreign Entity of Concern (FEOC) requirements and higher import duties on equipment and components. According to Wood Mackenzie, as much as 23 GW of operating solar module capacity could be affected. Cell manufacturing capacity, which is more complex and capital-intensive, could also moderate.

“On the demand side, the outlook across solar, energy storage, and distributed generation appears mixed. Except for projects that have already been safe-harbored, the investment tax credit (ITC) for solar is scheduled to phase out by the end of 2027. Meanwhile, energy storage projects must comply with annual FEOC requirements to maintain developer credits,” he said.

Despite this near-term uncertainty, the long-term outlook remains strong, according to Qu. Growing demand from AI, cryptocurrency, and other energy-intensive applications is driving higher electricity consumption, and solar plus storage remains among the most cost-competitive solutions to meet this demand.

At present, Qu stated that Canadian Solar is FEOC compliant and expects to remain so, supported by its three U.S. factories for modules, cells, and storage. “The OBBBA itself is clear regarding FEOC definitions and material requirements, and we already calculated that our products exceed the minimum thresholds for the coming years. If the IRS provides a standard table for calculation, as they have in the past, this will further simplify compliance.”

Regarding pricing, Qu said there is no top-down minimum module price, though some companies have voluntarily shown discipline in setting predefined prices. The market remains primarily driven by supply and demand.

Currently, upstream component prices are rising due to fewer players, which will likely push module prices higher as well, though perhaps not to the same extent. “We also noted some project sales have been pushed into the second half due to tariff issues, which are separate from FEOC considerations,” he said.

Outlook

For the third quarter of 2025, Canadian Solar expects revenue to be between $1.3 billion and $1.5 billion. CSI Solar is expected to ship between 5 and 5.3 GW of solar modules recognized as revenue. Battery energy storage shipments are expected to be between 2.1 and 2.3 GWh, including about 250 MWh to the company’s own projects.

For the full year 2025, CSI Solar expects to ship between 25 and 27 GW of solar modules, including about 1 GW to the company’s own projects. CSI Solar also expects to ship between 7 and 9 GWh of battery energy storage, including about 1 GWh to its own projects. Total company revenue for 2025 is expected to be between $5.6 billion and $6.3 billion.

The company noted that profit margins in the third quarter are likely to decline as market conditions remain difficult and storage profitability reflects more recent orders at normalized levels. Canadian Solar narrowed its full-year module shipment guidance and kept its storage guidance unchanged.

Revenue expectations for the year were reduced because some project sales were shifted into 2026 and because of a more cautious view on module pricing. It also highlighted challenges from rising solar supply chain costs and ongoing trade uncertainties, but said the company will continue to focus on balancing growth with profitability.

Canadian Solar’s revenue for the first quarter of 2025 dropped 10% YoY to $1.19 billion, as module and battery energy storage system sales had declined.