According to Shawn Qu, Canadian Solar’s chief executive, the company’s manufacturing division will respond to a projected overcapacity of solar cells next year in an attempt to avoid falling into an overcapacity trap. The company says it expects to finish 2021 with about 13,9 GW of solar cell manufacturing capacity but expects no rise in production volumes next year.

Qu expects that the PV maker's Capex budget would similar to this year’s despite the adjusted plans but says that final Capex levels have not yet been firmly set. Warnings of overcapacity will serve as yet another headwind for solar manufacturers to contend with, having spent the past year battling consistent cost increases and logistics challenges.

Qu says the operational environment “remains challenging”, with a combination of higher prices, logistics bottlenecks and power curtailment issues in China impacting its operations this year. While power curtailment is now easing in China, costs rose again since September, prompting a more “aggressive” attitude to module price increases.

In Q3, Canadian Solar shipped 3,9 GW of modules – up 22% year-on-year. Its revenue of US$1,23-billion was as expected, but its gross margin, at 18,6% was higher than expected (16%), indicating the price increases had been passed onto customers.

Qu said the business had snubbed low-priced orders in order to protect its margins. The company expects to ship between 3,7 and 3,9 GW in Q4 generating revenues of between US$1,5 and 1,6 billion, with a gross margin of between 14 and 16%.