Panels short out as solar soars

• Thomas Timmins, a lawyer at Gowlings in Toronto who heads the firm’s renewable energy practice, is not surprised by predictions from one of the world’s biggest solar-panel makers that the world may experience a shortage of solar panels later this year.

“Solar has crossed a threshold,” Timmins said. “Not only on islands such as Hawaii, Bermuda, Barbados and the Turks and Caicos, but in the mainstream as well.

“Solar halves in price every couple of years,” he added.

“You are seeing solar at a really low price, and that is driving up demand.”

Shawn Qu, chief executive of Canadian Solar Inc., the Guelph, Ont.based firm which is the world’s thirdbiggest panel maker, said Tuesday he expects a potential shortage of solar panels in the second half of this year as demand increases worldwide.

“Imbalance may appear,” Qu told Bloomberg News in Shanghai on Tuesday. “Customers’ real demand has been growing.”

Qu, an immigrant from China who studied at the Universities of Manitoba and Toronto, worked at Ontario Hydro (now Ontario Power Generation) before founding Canadian Solar in 2001. The company builds solar panels mainly in factories in China and also in plants in Guelph and London, Ont.

Timmins pointed to the Rainy River First Nation Solar Project, about 250 km southwest of Winnipeg in Northern Ontario, as just one example of the phenomenal growth in the solar industry in Canada alone. “You had 800 transport trucks of solar panels going up to Rainy River in the past six months,” he said. “That’s 25 megawatts of solar energy, an investment of over $100 million.”

Cheaper panels and cheaper batteries mean that not too long from now consumers will simply put solar panels on their roofs because that is cheaper than buying electricity off the grid.

The U.S.-based Rocky Mountain Institute warned earlier this month that utilities in the U.S. Northeast stand to lose as much as half of residential sales by 2030 as customers install solar and battery-storage systems and generate their own power.

To keep up with this increase in demand, Canadian Solar plans to almost double its panel capacity from 2013 levels, Qu said. Along with supply from original equipment manufacturing, total capacity will reach more than four gigawatts, he said.

It’s a far cry from the oversupply of solar panels that saw the company’s stock slump on Nasdaq to below US$3 in 2012. Since then, shares have gained 1,170 per cent, and climbed more than 50 per cent this year.

About 50 per cent of Canadian Solar’s sales are in Canada. Along with building solar panels, the company also builds solar farms in Canada, the U.S., China and Japan.

Its new cell factory in Funing, Jiangsu province will also add 400 megawatts of capacity in the fourth quarter to bring the total to as much as two gigawatts.

Canadian Solar earned a record US$239 million last year on US$2.96 billion in sales and panel shipments of 3.1 gigawatts. It expects to sell as much as 4.3 gigawatts of panels this year, a 39 per cent increase.

Canaccord Genuity earlier this month put out a research report on Canadian Solar, noting, “Overall, we believe that positive sentiment has returned to the solar group. ... We remain buyers of the top names in the group, including Canadian Solar.”

The company completed its US$265 million purchase of the San Francisco-based developer Recurrent Energy from Sharp Corp. in March, expanding the company’s power-project pipeline to 8.5 gigawatts.

“He knows what he’s doing,” Timmins said. “It’s a great Canadian story.” Shares of Canadian Solar closed at US$37.73, up US$2.08, on Nasdaq Tuesday.