CSIQ 20-F Report ended Dec. 31, 2024

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 20-F

(Mark One)

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OR

For the fiscal year ended December 31, 2024.

OR

OR

Date of event requiring this shell company report

For the transition period from to

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Commission file number: 001-33107

CANADIAN SOLAR INC.

(Exact name of Registrant as specified in its charter)

N/A

(Translation of Registrant’s name into English)

Ontario

(Jurisdiction of incorporation or organization)

4273 King Street East, Suite 102

Kitchener, Ontario,N2P 2E9

Canada

(Address of principal executive offices)

Xinbo Zhu, Chief Financial Officer

4273 King Street East, Suite 102

Kitchener, Ontario, N2P 2E9

Canada

Tel: 1 519-837 1881

Fax: 1 519-837 2550

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

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Securities registered or to be registered pursuant to Section 12(g) of the Act:

None

(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

None

(Title of Class)

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

66,954,634 common shares issued and outstanding which were not subject to restrictions on voting, dividend rights and transferability, as of December 31, 2024.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing: U.S. GAAP ☒

International Financial Reporting Standards as issued by the International Accounting Standards Board ☐ Other ☐

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. Item 17 ☐ Item 18 ☐

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ☐ No ☒

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☐ No ☐

†        The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

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Table of Contents

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INTRODUCTION

Unless the context otherwise requires, references in this annual report on Form 20-F to:

This annual report on Form 20-F includes our audited consolidated financial statements for the years ended December 31, 2022, 2023 and 2024 and as of December 31, 2023 and 2024.

Our reporting currency is the U.S. dollar. We use exchange rates set forth in the H.10 statistical release of the Federal Reserve Board to translate Renminbi, Euros, British pounds, Japanese yen, Canadian dollars, Australian dollars, Thai baht, Brazilian reals and South African rand to U.S. dollars not otherwise recorded in our consolidated financial statements and included elsewhere in this annual report on Form 20-F. Unless otherwise stated, the translation of Renminbi, Euros, British pounds, Japanese yen, Canadian dollars, Australian dollars, Thai baht, Brazilian reals and South African rand into U.S. dollars was made at the rate in effect on December 31, 2024, which was RMB 7.2993 to $1.00, €0.9661 to $1.00, £0.7987 to $1.00, ¥157.3700 to $1.00, C$1.4400 to $1.00, AUD 1.6168 to $1.00, THB 34.3200 to $1.00, BRL 6.1840 to $1.00 and ZAR 18.8792 to $1.00. We make no representation that any Renminbi, Euros, British pounds, Japanese yen, Canadian dollars, Australian dollars, Thai baht, Brazilian reals, South African rand or U.S. dollars amounts referred to in this annual report on Form 20-F could have been or could be converted into U.S. dollars, Euros, British pounds, Japanese yen, Canadian dollars, Australian dollars, Thai baht, Brazilian reals South African rand or Renminbi, as the case may be, at any particular rate or at all.

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FORWARD-LOOKING INFORMATION

This annual report on Form 20-F contains forward-looking statements that relate to future events, including our future operating results, our prospects and our future financial performance and condition, results of operations, business strategy and financial needs, all of which are largely based on our current expectations and projections. These forward-looking statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. You can identify these statements by terminology such as “may”, “will”, “expect”, “anticipate”, “future”, “ongoing”, “continue”, “intend”, “plan”, “potential”, “prospect”, “guidance”, “believe”, “estimate”, “is/are likely to” or similar expressions. Forward-looking statements involve inherent risks and uncertainties. These forward-looking statements include, among other things, statements relating to:

Known and unknown risks, uncertainties and other factors may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by forward-looking statements. See “Item 3. Key Information—D. Risk Factors” for a discussion of some of the risk factors that may affect our business and results of operations. These risks are not exhaustive. Other sections of this annual report may include additional factors that could adversely influence our business and financial performance. Moreover, because we operate in an evolving industry, new risk factors may emerge from time to time. We cannot predict all risk factors, nor can we assess the impact of all or any of these factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those expressed or implied in any forward-looking statement. We do not undertake any obligation to update or revise the forward-looking statements except as required under applicable law.

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PART I

Our Corporate Structure and Operations in China

Canadian Solar Inc. is a corporation governed by the laws of the province of Ontario, Canada, with operations in North America, Asia Pacific, Europe, Australia, South America, the Middle East and Africa through our operating subsidiaries in which we have equity ownership. Through the equity ownership in our subsidiaries, we primarily conduct our manufacturing operations in China, Southeast Asia and the U.S., and have made certain investments in solar power system and project assets in China. See “Item 4. Information on the Company—C. Organizational Structure” for additional information on our corporate structure, including a list of our significant subsidiaries. Investors in our common shares thus are not purchasing equity interests in our operating subsidiaries, but instead are purchasing equity interests solely in our Canadian parent company. As used in this annual report, references to “CSI”, “we”, “us”, “our company” or “our” are made as to Canadian Solar Inc. and its consolidated subsidiaries; references to “Canadian Solar Inc.” are made as to the Canadian parent company only.

We are exposed to legal and operational risks associated with having a significant portion of our manufacturing operations in China. We are subject to risks arising from the PRC legal system, including the uncertainty in the interpretation and enforcement of the evolving PRC policies, laws and regulations. In recent years, the Chinese government has implemented a series of regulatory actions and issued statements to regulate business operations in China with little advance notice. These include measures related to regulatory approvals on offerings conducted overseas, anti-monopoly regulatory actions, and oversight on cybersecurity and data privacy. Such actions could limit or completely hinder our ability to offer or continue to offer securities to investors. Implementation of industry-wide regulations in this nature may cause the value of such securities to significantly decline or be worthless. See “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China” for additional information of the risks associated with our operations in China.

For example, the promulgated Data Security Law and the Personal Information Protection Law, the Cybersecurity Review Measures issued by the Cyberspace Administration of China (“CAC”), and several other PRC governmental authorities, as well as the Regulations on Critical Information Infrastructure promulgated by the State Council in 2021 and the Regulations on Network Data Security Administration promulgated by the State Council in 2024, expose uncertainties and potential additional restrictions on China-based overseas-listed companies. Although we have not been informed that we are identified as a critical information infrastructure operator by any governmental authorities, we face uncertainties as to whether we will be subject to the oversight of the CAC and how such oversight may impact us. Measures for the Security Assessment of Outbound Data Transfers promulgated by the CAC took effect on September 1, 2022, and the provisions in the Guide to Applications for Security Assessment of Outbound Data Transfers (Second Edition) took effect on March 22, 2024. According to the rule, a data processor is required to apply to the national cyberspace administration for security assessment of outbound data transfer through local provincial cyberspace administration, if the data processor provides important data abroad. The rule is recently adopted, and it is not certain how the CAC will interpret and enforce it. If we are required to go through a security assessment of outbound data transfer, we will receive a notice on assessment result after completion of the assessment, and we may be notified to terminate the outbound data transfer or make rectification as required. In addition, we have to regulate our outbound data transfer activities in accordance with the applicable laws and regulations on the security management of outbound data transfer and the relevant requirements specified in the notice on assessment result. For a detailed discussion of the related risks, see “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—Failure to comply with PRC regulations and other legal obligations concerning cybersecurity, privacy, data protection and informational security may materially and adversely affect our business, as we routinely collect, store and use data during the conduct of our business.”

On February 17, 2023, the China Securities Regulatory Commission (“CSRC”) issued the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (“Trial Administrative Measures”) and relevant supporting guidelines (collectively, the “Filing Measures”), which became effective on March 31, 2023. According to the Filing Measures, a PRC domestic company that seeks to offer and list securities in overseas markets shall fulfill the filing procedure with the CSRC as per requirement of the Filing Measures. When a PRC domestic company seeks to directly offer and list securities in overseas markets, the issuer shall file with the CSRC. When a PRC domestic company seeks to indirectly offer and list securities in overseas markets, the issuer shall designate a major PRC domestic operating entity, which shall, as the domestic responsible entity, file with the CSRC. Initial public offerings or listings in overseas markets, including issuance of shares, convertible notes and other similar securities, shall be filed with the CSRC within three working days after the relevant application is submitted overseas. If an issuer offers securities in the same overseas market where it has previously offered and listed securities, subsequent filings shall be made with the CSRC within three working days after the offering is completed. In addition, upon the occurrence of any material event, such as change of control, investigations or sanctions imposed by overseas securities regulatory agencies or other relevant competent authorities, change of listing status or transfer of listing segment, or voluntary or mandatory delisting, after an issuer has offered and listed securities in an overseas market, the issuer shall submit a report to CSRC within three working days after the occurrence and public disclosure of such event. Therefore, we will be required to submit filings to the CSRC in the event that we conduct any subsequent offerings, including issuance of shares, convertible notes and other similar securities.

On February 24, 2023, the CSRC, the Ministry of Finance, the National Administration of State Secrets Protection and the National Archives Administration of China jointly issued the Provisions on Strengthening Confidentiality and Archives Administration of Overseas Securities Offering and Listing by Domestic Enterprises which took effect on March 31, 2023. These provisions extend the scope of application to overseas indirectly listed enterprises. To provide or publicly disclose to the relevant individuals or entities, including securities companies, securities service providers and overseas regulators, or to provide or publicly disclose, through its overseas listing entities, any documents or materials that contain state secrets or working secrets of government agencies, a PRC domestic enterprise shall strictly fulfill relevant procedures stipulated by applicable national regulations, and when providing documents and materials to the relevant securities companies and securities service providers, a PRC domestic enterprise shall first obtain approval from competent authorities according to the law, file with the secrecy administrative department at the same level, and provide the relevant securities companies and securities service providers with a written statement on the implementation of the relevant requirements of this provision. A PRC domestic enterprise shall fulfill due procedures in compliance with applicable national regulations, if it provides accounting archives or copies of accounting archives to any relevant individuals and entities, including securities companies, securities service providers and overseas regulators.

It is uncertain whether we will be required to obtain permission from the PRC government to maintain our listing status on U.S. exchanges or continue to offer our securities to investors in the future, and even when such permission is obtained, whether it will be later denied or rescinded. For a detailed discussion of the related risks, see “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—Any actions by the PRC government to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of our securities to significantly decline or be worthless.”

Furthermore, with the trend of strengthening anti-monopoly supervision around the world, the PRC government has promulgated new anti-monopoly and competition laws and regulations and strengthened the enforcement under these laws and regulations, paying more attention to corporate compliance. On February 7, 2021, the Anti-monopoly Commission of the State Council issued the Guidelines for Anti-monopoly in the field of Platform Economy, which require anti-monopoly review for concentrations of undertakings involving variable interest entities in internet industry. On November 15, 2021, the State Administration for Market Regulation issued the Guidelines for the Overseas Anti-monopoly Compliance of Enterprises. Although we believe these regulations have little impact on our business, there remain uncertainties regarding their interpretation and enforcement. We cannot guarantee that regulators will agree with us or that our business operations comply with such regulations and authorities’ requirements in all respects. If any non-compliance is raised by relevant authorities and determined against us, we may be subject to fines and other penalties. For a detailed discussion of the related risks, see “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—The rules and regulations in China can change quickly with little advance notice. Uncertainties with respect to the PRC legal system, as well as changes in any government policies, laws and regulations, could affect our industry and our ability to conduct our operations in China, which could harm our business.”

Risks and uncertainties arising from the Chinese legal system, including risks and uncertainties that the rules and regulations may be inconsistent and change quickly with little advance notice and that the Chinese government may intervene or influence the operations of our PRC subsidiaries at any time, could result in a material change in our operations and the value of our securities. In addition, implementation of industry-wide regulations directly targeting our operations could cause the value of our securities to significantly decline. For a detailed discussion of the related risks, see “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—The rules and regulations in China can change quickly with little advance notice. Uncertainties with respect to the PRC legal system, as well as changes in any government policies, laws and regulations, could affect our industry and our ability to conduct our operations in China, which could harm our business.” and “Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China—The PRC government has exercised and continues to exercise substantial control over the economy. It may intervene in or influence the operations of our PRC subsidiaries at any time, which could result in material changes to our operations and the value of our securities.”

The Holding Foreign Companies Accountable Act

Pursuant to the Holding Foreign Companies Accountable Act, or the HFCAA, which was enacted on December 18, 2020 and further amended by the Consolidated Appropriations Act, 2023 signed into law on December 29, 2022, if the SEC determines that we have filed audit reports issued by a registered public accounting firm that has not been subject to inspection by the Public Company Accounting Oversight Board, or the PCAOB, and that we are a Commission-Identified Issuer under the HFCAA for two consecutive years, the SEC will prohibit our common shares from being traded on a national securities exchange or in the over-the-counter trading market in the U.S. In the event of such determination, the Nasdaq is expected to delist our common shares.

On December 16, 2021, the PCAOB issued a report to notify the SEC its determinations that it was unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong. Our auditor, Deloitte Touche Tohmatsu Certified Public Accountants LLP, an independent registered public accounting firm located in China, was subject to that determination. On May 26, 2022, we were conclusively identified as a “Commission-Identified Issuer” under the HFCAA following the filing of our annual report on Form 20-F for the fiscal year ended December 31, 2021. On December 15, 2022, the PCAOB issued a report that vacated its previous determinations issued on December 16, 2021 and removed mainland China and Hong Kong from the list of jurisdictions where it is unable to inspect or investigate completely registered public accounting firms. Therefore, our auditor is currently able to be fully inspected and investigated by the PCAOB. For this reason, we were not identified as a Commission-Identified Issuer under the HFCAA after we filed our annual report on Form 20-F for the fiscal year ended December 31, 2022, and do not expect to be so identified when we file this annual report on Form 20-F for the fiscal year ended December 31, 2024. Until such time as the PCAOB issues any new determination, we do not expect our securities to be subject to a trading prohibition under the HFCAA. On February 21, 2025, the U.S. administration undertakes, among other things, to determine if adequate financial auditing standards are upheld for companies covered by the HFCAA.

However, it is uncertain whether the PCAOB will continue to be able to satisfactorily inspect and investigate registered public accounting firms in mainland China and Hong Kong, among other jurisdictions. If in the future, the PCAOB finds that it is unable to completely inspect and investigate registered public accounting firms in mainland China and Hong Kong, the PCAOB may act immediately to consider the need to issue a new determination, and we may be identified as a Commission-Identified Issuer again. In accordance with the HFCAA as amended by the Consolidated Appropriations Act, 2023, our securities would be prohibited from being traded on a national securities exchange or in the over-the-counter trading market in the U.S. if we are identified as a Commission-Identified Issuer for two consecutive years. Furthermore, we cannot assure you whether Nasdaq or regulatory authorities would apply additional and more stringent criteria to us after considering the effectiveness of our auditor’s audit procedures and quality control procedures, adequacy of personnel and training, or sufficiency of resources, geographic reach or experience as it relates to the audit of our financial statements. In addition, any additional actions, proceedings, or new rules resulting from these efforts to increase U.S. regulatory access to audit information could create some uncertainty for investors, adversely affect the market price of our ordinary shares, and we could be delisted if we and our auditor are unable to meet the PCAOB inspection requirement or are required to engage a new audit firm, which would require significant expense and management time. The delisting or prohibition of trading of our common shares, or the threat of their being delisted or prohibited from trading, may materially and adversely affect the value of your investment. For a detailed discussion of the related risks, see “Item 3. Key Information—D. Risk Factors—Risks Related to Our Company and Our Industry—Our common shares may be prohibited from trading in the United States under the HFCAA in the future if it is later determined that the PCAOB is unable to inspect or investigate completely our auditor. The delisting or prohibition of trading of our common shares, or the threat of their being delisted or prohibited from trading, may materially and adversely affect the value of your investment.”

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ITEM 1  IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable.

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ITEM 2  OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

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ITEM 3  KEY INFORMATION

Risks Related to Doing Business in China

Canadian Solar Inc. is a corporation governed by the laws of the province of Ontario, Canada with operations in North America, Asia Pacific, Europe, Australia, South America, the Middle East and Africa through our operating subsidiaries in which we have equity ownership. Through the equity ownership in our subsidiaries, we primarily conduct our manufacturing operations in China, Southeast Asia and the U.S., and have made certain investments in solar power system and project assets in China. As a result, we are subject to significant regulatory, liquidity, and enforcement risks relating to doing business in China, including, but not limited to, the following:

For further details, see “—D. Risk Factors—Risks Related to Doing Business in China” and “—D. Risk Factors—Risks Related to Our Common Shares.”

Permissions Required from the PRC Authorities for Our Operations

We conduct our business in the PRC through our PRC subsidiaries. Our operations in the PRC are governed by PRC laws and regulations. We are required to obtain or complete construction enterprise and engineering qualifications, electric power business permit, work safety license, registration of foreign trade operator operators, and registration certificates of customs declaration entity to operate our business in China. As of the date of this annual report, we believe that our PRC subsidiaries have obtained and completed all requisite permissions and registrations for our operations in all material aspects from relevant PRC authorities and none of the requisite permission or registrations for our operations in all material aspects have been denied by relevant PRC authorities. However, given the uncertainties of interpretation and implementation of relevant laws and regulations and the enforcement practice by government authorities, we cannot assure you that we have obtained all the permits or licenses required for conducting our business in the PRC.

If we or our PRC subsidiaries (i) do not receive or maintain any permission or approval required of us or our PRC subsidiaries, (ii) inadvertently conclude that certain permissions or approvals have been acquired or are not required, or (iii) are required to obtain permissions or approvals in the future in the event of a change to the applicable laws, regulations, or interpretations, but we fail to obtain such permissions or approvals in a timely manner, or at all, we may face adverse actions or sanctions by PRC regulatory authorities, which may include fines and penalties on our operations in China, order to suspend our PRC subsidiaries’ businesses, and other actions that could have an adverse effect on our business. Furthermore, our ability to offer or continue to offer securities to investors may be significantly limited or completely hindered, and the value of our securities may significantly decline or be worthless.

In addition, the PRC government has promulgated certain regulations and rules to exert more oversight and control over offerings that are conducted overseas and/or foreign investment. According to the Filing Measures which came into effect on March 31, 2023, a PRC domestic company that seeks to directly or indirectly offer and list securities in overseas markets are required to file with the CSRC. In addition, follow-on offerings or listings in overseas markets, including issuance of shares, convertible notes and other similar securities, shall be filed with the CSRC within a specified time frame under the Filing Measures. Therefore, we will be required to submit filings to the CSRC in the event that we conduct any subsequent offerings, including issuance of shares, convertible notes and other similar securities.

For a detailed discussion of the related risks, see “—D. Risk Factors—Risks Related to Doing Business in China—Any actions by the PRC government to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of our securities to significantly decline or be worthless.” and “—D. Risk Factors—Risks Related to Doing Business in China—Failure to comply with PRC regulations and other legal obligations concerning cybersecurity, privacy, data protection and informational security may materially and adversely affect our business, as we routinely collect, store and use data during the conduct of our business.”

Cash and Asset Flows through Our Organization

We conduct operations in North America, Asia Pacific, Europe, Australia, South America, the Middle East and Africa through our operating subsidiaries in which we have equity ownership. Our manufacturing operations are conducted through our subsidiaries primarily in China, Southeast Asia and the U.S. in which we have equity ownership and a significant portion of our revenues and cash flow is generated by our PRC subsidiaries, and a substantial part of our expenses, cash and cash equivalent, and restricted cash are denominated in Renminbi.

Cash may be transferred within our consolidated group by way of funds to our subsidiaries, either in the form of capital contributions, working capital cash advances or working capital payable, directly or through intermediate holding companies. Canadian Solar Inc. may provide loans to its subsidiaries and vice versa, and our subsidiaries may make dividends or other distributions to Canadian Solar Inc., directly or through intermediate holding companies. These cash transfers factor the capital and liquidity needs of our subsidiaries, and are subject to our internal approval processes and funding arrangements, taking into account local regulations and tax laws. We have not faced restrictions or limitations in our ability to transfer cash between subsidiaries in countries where we earn and hold significant cash, or continue to make significant investments.

Canadian Solar Inc. transferred an aggregate of $187.5 million, $84.4 million and $16.5 million, of cash in the form of capital contributions and loans to our subsidiaries in 2022, 2023 and 2024, respectively. Canadian Solar Inc. received an aggregate $11.0 million, $245.0 million and $46.7 million in 2022, 2023 and 2024 of cash related to net working capital advances to subsidiaries, respectively. These transfers were made to our Recurrent Energy subsidiaries primarily for solar power and battery energy storage projects. There were no transfers made to the PRC subsidiaries. Our PRC operations are generally funded through the revenue cash flows from the sales of solar modules, solar system kits and battery energy storage solutions, and domestic borrowings.

Canadian Solar Inc. received an aggregate of $172.6 million, $69.2 million and $32.3 million of cash in 2022, 2023 and 2024, respectively, from repayment of loans by our Recurrent Energy subsidiaries. Canadian Solar Inc. transferred an aggregate of $49.6 million in cash to repay a loan from a Recurrent Energy subsidiary in 2022. Canadian Solar Inc. further received an aggregate $38.6 million in 2022, and transferred an aggregate $232.7 million and $44.6 million in 2023 and 2024 of cash related to net working capital payable to our Recurrent Energy subsidiaries, respectively. There were no cash proceeds nor distribution received from PRC subsidiaries in 2022 and 2023. Canadian Solar Inc. received an aggregate of $34.7 million in cash, net of $3.9 million in withholding tax, from dividends distributed by CSI Solar, its PRC subsidiary, in 2024.

In addition, we conduct regular procurement transactions with CSI Solar’s subsidiaries related to purchase of modules and battery energy storage solutions for our Recurrent Energy projects.

Our ability to pay dividends, if any, to our shareholders and to service any debt we may incur will depend upon dividends paid by and loan repayment or distributions by our subsidiaries. Under PRC laws and regulations, our PRC subsidiaries are subject to certain restrictions with respect to paying dividends or otherwise transferring any of their net assets offshore to us. In particular, our PRC subsidiaries are required to set aside no less than 10% of profit after tax as appropriations to the general reserve and other statutory reserves. These reserves, together with the registered capital, are not distributable as cash dividends except in the event of liquidation and with approval from the local PRC government. As of December 31, 2024, these restricted net assets in the PRC amounted to $1,593.3 million. Furthermore, our PRC subsidiaries are subject to restrictions on currency exchange. Under existing PRC foreign exchange regulations, payments of current account items, including profit distributions, interest payments and expenditures from trade-related transactions, can be made in foreign currencies without prior approval from the People’s Bank of China and State Administration of Foreign Exchange, or SAFE, by complying with certain procedural requirements. However, the relevant PRC governmental authorities may limit or eliminate our PRC subsidiaries’ ability to purchase foreign currencies in the future for current account transactions. Since a significant portion of our future revenues and cash flow will be generated by our PRC subsidiaries, and a substantial part of our expense, cash and cash equivalents, and restricted cash are denominated in Renminbi, any existing and future restrictions on dividend or currency exchange may limit our ability to utilize cash generated by our PRC subsidiaries to fund our business activities outside of the PRC or pay dividends in foreign currencies.

In other countries where we earn and hold significant cash, or continue to make significant investments, we believe there are no significant restrictions or limitations on foreign exchange, our ability to transfer cash between entities across borders or to U.S. investors, or our ability to distribute earnings from our subsidiaries. Changes in business environments, debt instruments entered into by our subsidiaries, regulatory changes, and limitations under PRC laws and regulations and other developments outside of our control may prevent some or all of our subsidiaries from making distributions or payments to us in the future.

The Holding Foreign Companies Accountable Act

Pursuant to the HFCAA, which was enacted on December 18, 2020 and further amended by the Consolidated Appropriations Act, 2023 signed into law on December 29, 2022, if the SEC determines that we have filed audit reports issued by a registered public accounting firm that has not been subject to inspection by the PCAOB, and that we are a Commission-Identified Issuer under the HFCAA for two consecutive years, the SEC will prohibit our common shares from being traded on a national securities exchange or in the over-the-counter trading market in the U.S. In the event of such determination, the Nasdaq is expected to delist our common shares.

On December 16, 2021, the PCAOB issued a report to notify the SEC its determinations that it was unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong. Our auditor, Deloitte Touche Tohmatsu Certified Public Accountants LLP, an independent registered public accounting firm located in China, was subject to that determination. On May 26, 2022, we were conclusively identified as a “Commission-Identified Issuer” under the HFCAA following the filing of our annual report on Form 20-F for the fiscal year ended December 31, 2021. On December 15, 2022, the PCAOB issued a report that vacated its previous determinations issued on December 16, 2021 and removed mainland China and Hong Kong from the list of jurisdictions where it is unable to inspect or investigate completely registered public accounting firms. Therefore, our auditor is currently able to be fully inspected and investigated by the PCAOB. For this reason, we were not identified as a Commission-Identified Issuer under the HFCAA after we filed our annual report on Form 20-F for the fiscal year ended December 31, 2022, and do not expect to be so identified when we file this annual report on Form 20-F for the fiscal year ended December 31, 2024. Until such time as the PCAOB issues any new determination, we do not expect our securities to be subject to a trading prohibition under the HFCAA. On February 21, 2025, the U.S. administration undertakes, among other things, to determine if adequate financial auditing standards are upheld for companies covered by the HFCAA.

However, it is uncertain whether the PCAOB will continue to be able to satisfactorily inspect and investigate registered public accounting firms in mainland China and Hong Kong, among other jurisdictions. If in the future, the PCAOB finds that it is unable to completely inspect and investigate registered public accounting firms in mainland China and Hong Kong, the PCAOB may act immediately to consider the need to issue a new determination, and we may be identified as a Commission-Identified Issuer again. In accordance with the HFCAA as amended by the Consolidated Appropriations Act, 2023, our securities would be prohibited from being traded on a national securities exchange or in the over-the-counter trading market in the U.S. if we are identified as a Commission-Identified Issuer for two consecutive years. Furthermore, we cannot assure you whether Nasdaq or regulatory authorities would apply additional and more stringent criteria to us after considering the effectiveness of our auditor’s audit procedures and quality control procedures, adequacy of personnel and training, or sufficiency of resources, geographic reach or experience as it relates to the audit of our financial statements. In addition, any additional actions, proceedings, or new rules resulting from these efforts to increase U.S. regulatory access to audit information could create some uncertainty for investors, adversely affect the market price of our ordinary shares, and we could be delisted if we and our auditor are unable to meet the PCAOB inspection requirement or are required to engage a new audit firm, which would require significant expense and management time. The delisting or prohibition of trading of our common shares, or the threat of their being delisted or prohibited from trading, may materially and adversely affect the value of your investment. For a detailed discussion of the related risks, see “Item 3. Key Information—D. Risk Factors—Risks Related to Our Company and Our Industry—Our common shares may be prohibited from trading in the United States under the HFCAA in the future if it is later determined that the PCAOB is unable to inspect or investigate completely our auditor. The delisting or prohibition of trading of our common shares, or the threat of their being delisted or prohibited from trading, may materially and adversely affect the value of your investment.”

Not applicable.

Not applicable.

Summary of Risk Factors

An investment in our common shares involves significant risks. Below is a summary of material risks we face, organized under relevant headings. These risks are discussed more fully in “Item 3. Key Information—D. Risk Factors.”

Risks Related to Our Company and Our Industry

Risks and uncertainties related to our company and industry include, but are not limited to, the following:

Risks Related to Doing Business in China

We are also subject to risks and uncertainties related to doing business in China, including, but are not limited to, the following:

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Risks Related to Our Common Shares

In addition to the risks described above, we are subject to risks related to our common shares:

Risks Related to Our Company and Our Industry

We may be adversely affected by volatility in the solar power and battery energy storage market and industry conditions; in particular, the demand for our solar power and battery energy storage products and services may not grow as expected or may decline.

Our business is affected by conditions in the solar power and battery energy storage markets and industries. While we expect continued growth in global electricity demand and increasing adoption of solar and battery energy storage technologies, these markets may experience periods of volatility or grow more slowly than anticipated. For example, the solar power sector may from time to time experience oversupply, which can negatively impact our pricing and profitability. In such instances, project developers, system installers and product distributors that purchase solar power products and services from manufacturers like us, may be adversely affected, thereby reducing demand for our offerings. Our shipments of solar modules experienced continuous growth in 2022 and 2023, followed by a marginal increase in 2024. The average selling prices for our solar modules increased in 2022, then decreased in 2023 and 2024. When certain distributed generation markets experience higher than anticipated inventory levels, we may face heightened price competition, which could materially and adversely affect our financial results. In addition, if the supply of solar modules grows faster than demand and if governments reduce financial support for the industry or impose trade barriers for solar power products, demand and pricing for our products could be adversely affected.

The battery energy storage market continues to evolve, and future demand for battery energy storage products and services is uncertain. Market data for the battery energy storage industry is not as readily available as for more established industries, where trends are more reliably assessed from data gathered over a longer period of time. In addition, demand for battery energy storage products and services in our largest end markets, including the U.S., Europe, China, the U.K. and Australia, may not materialize to the extent or on the timeline we anticipate. We are actively pursuing growth opportunities in battery energy storage, given its importance in enhancing the reliability and resiliency of energy grid infrastructure, and integrating intermittent renewable energy power systems. If demand in our key markets slows, competition intensifies, or we fail to capitalize on growth opportunities, our battery energy storage business may not grow as anticipated. Furthermore, while we are working to improve the cost-efficiency and performance of our battery energy storage systems, there can be no assurance that we will achieve our desired outcomes.

The viability of solar power and battery energy storage technologies depend on several factors, including:

If solar power and battery energy storage technologies are not adopted as broadly or as quickly as we expect, or if demand weakens or becomes more volatile, our revenues, profitability and growth prospects may be materially and adversely affected.

Our future success depends on our ability to execute our ongoing transition to a long-term owner and operator of solar and battery energy storage assets and expand our project development pipelines in key markets, which exposes us to various risks and uncertainties.

Historically, our project development business has primarily consisted of developing solar and battery energy storage assets for sale to third parties. As part of our ongoing transition to a long-term owner and operator of solar and battery energy storage assets, we are shifting towards retaining longer-term ownership in select markets. While this transition may reduce revenue from project sales, it is expected to increase recurring revenues from the sale of electricity, capacity and ancillary services from operational projects. Revenues from our sale of electricity, battery energy storage operations and others increased by $26.0 million and $33.5 million, or 81.3% and 7.8%, to $57.9 million and $91.4 million in 2023 and 2024, respectively.

Project ownership, operations and development involve risks and uncertainties, including:

Many solar power and battery energy storage projects, including our own, depend on a mix of equity capital, tax equity and project financing to fund development and construction. A higher cost of capital may materially reduce the internal rate of return for these projects. Furthermore, there is no guarantee that tax equity investors will be available or willing to provide funding on acceptable terms, or that the tax incentives and benefits that are needed to make tax equity funding available will remain in place. Moreover, as a result of the effects of inflation in the global economy, certain governmental authorities responsible for administering monetary policy have sustained a higher central bank interest rates, which could increase the costs to obtain debt financing in the future or refinance current indebtedness. In addition, higher bond yields could result in increased return expectations for solar power and battery energy storage projects, which would result in lower valuation for these assets.

The availability and cost of funding of these projects are determined in part based on the perceived counterparty creditworthiness or sovereign credit risk of the country where a particular project is located. We cannot make assurances that financial institutions will continue to offer funding to solar power and battery energy storage project developers and owners at reasonable costs. An increase in cost of capital and interest rates or a decrease in available funding within the global financial market could make it more difficult to fund solar power and battery energy storage systems. This could hamper our transition to a long-term owner and operator of solar and battery energy storage assets, which may materially and adversely affect our business, results of operations, financial condition and prospects.

Our sale of solar power and battery energy storage projects depends heavily on our ability to find third-party buyers for our projects in a timely manner and on favorable terms and conditions.

Our project development activities have significantly expanded to North America, Europe, Latin America, Japan, Australia, and other countries of the Asia-Pacific region over the past several years. Upon completion of development, we either operate our solar power or battery energy storage projects, with a majority of our aggregate capacity contracted under power purchase agreements, virtual power purchase agreements, tolling agreements, or other contractual arrangements with offtakers, or sell them to third-party buyers. As we shift towards retaining longer-term ownership in select markets in order to create greater asset value and increase recurring revenues generated through the sale of electricity and related products, as well as the sale of power services (operations and maintenance), revenues from our sale of solar power and battery energy storage projects decreased by $362.6 million, or 47.6%, to $399.1 million in 2023, and then decreased by $242.4 million, or 60.7%, to $156.7 million in 2024.

For solar power and battery energy storage projects that we decide to sell, there is no assurance whether or when we will be able to realize their estimated resale value. From time to time, we may reclassify project assets as solar power systems if our intention transitions to holding these projects on our balance sheet for the purpose of generating long-term electricity income.

Our sale of solar power and battery energy storage projects may be subject to significant period-over-period fluctuations for a variety of reasons, including but not limited to the unpredictability of the timing of development and construction of our projects, changes in market conditions after we have committed to projects, availability of financing for our projects, changes in government regulations and policies, changes in the creditworthiness of our contractual counterparties, equipment damage or failures, and weather events, all of which may result in the cancellation of or delays in the development of projects, inability to monetize or delays in monetizing projects or changes in amounts realized on monetization of projects. If a project is canceled, abandoned or deemed unlikely to occur, we will charge all prior capital costs as an operating expense in the period in which such determination is made, which could materially and adversely affect our operating results.

Some classes of investors compare the returns of solar power and battery energy storage projects to bond yields and expect a similar or higher internal rate of return, adjusted for risk and liquidity. Higher bond yields could result in increased return expectations for solar power and battery energy storage projects, which would result in lower sale prices for these assets, which may materially and adversely affect our business, results of operations, financial condition and prospects.

Oversupply of polysilicon, solar wafers, cells and modules may cause substantial downward pressure on the prices of our products and reduce our revenues and earnings.

The solar industry has been experiencing significant fluctuations in the supply and pricing of polysilicon, solar wafers, cells and modules. Recently, global silicon production capacity has expanded rapidly, leading to an oversupply and subsequent decline in polysilicon prices. This oversupply has exerted substantial downward pressure on prices of solar wafers, cells and modules throughout the value chain. The average selling prices of our solar modules decreased from $0.30 per watt in 2022 to $0.23 per watt in 2023, and further decreased to $0.16 per watt in 2024. While the persistent oversupply and price reductions have benefited customers through lower prices, they have intensified competition among manufacturers. Although we believe that balancing our production capacity with demand has helped protect our margins, a prolonged supply of polysilicon, solar wafers, cells, and modules in excess of market demand may result in further downward price pressure, including on our products. Increasing competition could also result in us losing sales or market share. In addition, we are exposed to inventory risk that may adversely affect our earnings as a result of unfavorable product pricing changes.

On the other hand, demand for solar products remains strong and may continue to increase, driven by various factors such as the global efforts toward clean, renewable energy sources and decarbonization, which could result in increased costs of and difficulties in sourcing raw materials to support the increased production levels due to capacity limitations. As a result, we may not be able to keep up with rapid growth in the future demand for our solar products. Due to fluctuations in the supply and pricing of solar power products throughout the value chain, we may not be able to consistently procure silicon, solar wafers and cells at reasonable costs if any of the above factors materialize. If we are unable to obtain these materials at reasonable prices or increase the price of our solar modules to cover our manufacturing and operating costs, our revenues and margins may be adversely impacted due to higher costs compared to our competitors. In addition, our market share could decline if our competitors are able to price their products more competitively.

Governments may revise, reduce or eliminate incentives and policy support schemes for solar power and battery energy storage.

Historically, the renewable power and clean energy industries, and the overall growth of the solar power and battery energy storage market, have generally benefited from government subsidy programs and economic incentives. Government incentives vary by geographic market. These governments provided incentives in the form of tax credits, renewable portfolio standards, auctions for CfD, FIP, FIT, rebates and other forms of support. Governments in many countries have implemented mandates to promote the use of renewable power and clean energy, encouraging end-users, power producers and utilities to adopt the use of solar energy solutions and to reduce dependency on other forms of energy. However, many of these government mandates and incentives have been or are scheduled to be reduced or eliminated altogether, and it is likely that incentives for solar and alternative energy technologies will eventually be phased out completely. Changes in energy laws or policies could also undermine the economic returns of new and existing projects.

While the cost of solar power and battery energy storage products has generally declined in recent years and the industry has become less dependent on government incentives, continued support remains important for market growth. For example, governments in some of our largest markets, including the U.S. and a number of the states of the European Union have continuing incentives and policy support schemes for various forms of “green” energies, including solar power and battery energy storage.

In the U.S., renewable energy projects benefit from various federal, state and local governmental incentives, such as Investment Tax Credit (“ITC”), Production Tax Credit (“PTC”) and Renewable Portfolio Standards (“RPS”) programs, accelerated tax depreciation, and other incentives provided for under the Inflation Reduction Act of 2022 (“IRA”), signed into law on August 16, 2022. The provisions of the IRA are intended to, among other things, incentivize domestic clean energy investment, manufacturing and production. The IRA enhances the ITC program, allows solar energy projects to utilize the PTC program, and provides a refundable or transferable advanced manufacturing tax production credit pursuant to Section 45X of the Internal Revenue Code for solar modules and solar module components manufactured in the United States and sold to third parties. The IRA also offers additional credits for projects located in energy communities and projects satisfying domestic content requirements. In June 2023, the United States Internal Revenue Service (“IRS”) issued temporary and proposed regulations related to tax credit transferability and direct pay provisions of the IRA. The final regulations became effective, and prior temporary regulations were replaced, beginning in May 2024.

In Europe, a number of member countries (including, Italy, France, Germany and Spain) continue to support realization of solar projects through incentive schemes and auctions, with additional limitations and regulations on agricultural land as compared to industrial and commercial zones, and the enactment of new laws in order to simplify the permitting process and enhance administrative resources to promote renewable energy sources. The European Union revised the Renewable Energy Directive, which entered into force on November 20, 2023, that may provide additional support for solar and battery energy storage development. As part of the revised directive, EU member states are required to implement permitting reforms by mid-2024 and to designate renewables acceleration areas by February 2026 to streamline project approvals and facilitate faster deployment.

We believe that the demand for solar power and battery energy storage products, services and projects is heavily affected by the availability and size of such government incentives, as well as, changes in energy laws and policies. The revision, reduction or elimination of these incentives and negative changes in energy laws and policies could therefore materially and adversely affect the growth of one or more of our markets, deter investment in clean energy, reduce customer demand, or result in increased price competition, either of which could cause our revenues to decline and harm our financial results.

Global economic conditions, including inflationary pressures and higher interest rates, may have an adverse impact on our business prospects, results of operations and cash flows.

Our operations are subject to the effects of global economic conditions, including inflation, interest rates, and foreign exchange rates, which consequently may affect demand for electricity and the supply and prices of other energy products, such as oil, natural gas and coal. Economic downturn could result in a decrease in global energy prices and demand for electricity, which could place downward pressure on the price of solar power and battery energy storage systems, and weaken demand.

Inflationary pressures may increase supplier costs, wages, operating costs and financing costs, which could reduce our profitability and cash flows if we are unable to pass along these costs to our customers. Inflation may also adversely affect foreign exchange rates, further affecting our results of operations. In addition, higher interest rates could have a dampening effect on overall economic activity and weaken our customers’ financial condition, reducing demand for our products and services. These factors, alone or in combination, could materially and adversely affect our business prospects, financial condition, results of operations and cash flows.

Our project construction activities may not complete on time, and our development and construction costs could increase to levels that cause the return on our investment in the projects to be lower than expected.

The development and construction of solar power and battery energy storage projects can take many months or years to complete and may be delayed for reasons beyond our control. There can be no assurance that the projects can be completed on time or within projected costs. Furthermore, we may become constrained in our ability to simultaneously fund our other business operations and invest in other projects. In contrast to producing and selling solar modules and battery energy storage products, developing solar power and battery energy storage projects requires more management attention to negotiate the terms of our engagement and monitor the progress of the projects which may divert management’s attention from other matters.

The development and construction of solar power and battery energy storage projects involve known and unknown risks, many of which are not under our sole control. For example, we may be required to invest significant upfront investments in land and interconnection rights, permitting and engineering, and may incur legal and other expenses before we can determine whether a project is feasible. Additionally, in certain cases, we may need to order equipment with lengthy lead time, such as substation transformers. Success in developing a particular project is contingent upon, among other things:

In addition, successful completion of a particular project may be adversely affected by numerous factors, including:

Any of these factors could lead to construction delays and construction costs in excess of our expectations. These circumstances could prevent our solar power and battery energy storage projects from commencing operations on time or achieving our anticipated return on our investments. In addition, failure to meet agreed-upon system level capacity, energy output guarantees, warranties or other contract terms, could lead to contract terminations, grid interferences or project related damages. Depending on the specified terms of the EPC agreements, the offtake, capacity and ancillary service contracts or other agreements related to the project, we may be subject to significant damages, penalties, and other obligations, including obligations to repair, replace or supplement materials for the project. If a third-party EPC contractor is terminated or resigns, we may be forced to take on additional risks, such as cost inflation and construction responsibilities that would otherwise be covered by the contractor. There is no assurance that disputes with third-party EPC contractors will not arise in the future. Any of these events could materially and adversely affect our business, results of operations and financial conditions.

We face a number of risks involving offtake contracts, including failure or delay in entering into contracts, defaults by counterparties and contingent contractual terms such as price adjustment, termination, buy-out, acceleration and other clauses.

In our solar power and battery energy storage project development business, we enter into a wide range of offtake contracts, including but not limited to PPAs, VPPAs, and other contracts for capacity and ancillary services. There is a limited, but growing, pool of potential buyers for electricity generated and services provided by our solar power and battery energy storage projects since the transmission and distribution of electricity is often regulated or highly concentrated in many jurisdictions. The willingness of buyers to enter into contracts with independent power producers such as us depends on a number of factors beyond pricing and supply reliability. Failure to enter into offtake contracts on favorable terms, or at all, could negatively impact our revenue and our decisions regarding the development of future projects. Delays in entering into offtake contracts, or an inability to renew or replace expiring contracts with comparable terms and conditions, may adversely affect our ability to finance project construction and realize cash flows from our projects, and the affected site may temporarily or permanently cease operations, or face exposure to more uncertain merchant electricity pricing, which could materially and adversely affect our financial condition, results of operations and cash flows.

We are exposed to the creditworthiness of the purchasers of power under these contracts, and there is no guarantee that our counterparties will be able or willing to fulfill their related contractual obligations. If they refuse to accept delivery of the power or services delivered thereunder or they otherwise terminate them prior to their expiration, our results of operations and cash flows could be materially and adversely affected. Further, to the extent any of our power purchasers are, or are controlled by, governmental entities, our facilities may be subject to legislative or other political action that may impair their contractual performance or contain contractual remedies that do not provide adequate compensation in the event of a counterparty default.

Some of our offtake contracts are subject to price adjustments over time. If the price under a contract falls below a level that makes a project economically viable, our results of operations and cash flows could be materially and adversely affected. In addition, certain inflation-based price adjustments are made only yearly, which may not allow us to pass on additional costs in a timely manner. Certain offtake contracts may contain provisions that allow the counterparty to terminate or buy out the project, or require us to pay liquidated damages upon the occurrence of specific events. If these provisions are exercised, our financial condition, results of operations and cash flows could be materially and adversely affected. To the extent the output of a project is not fully subject to offtake contracts, the electricity generated will be exposed to merchant price risk. Additionally, some project-level financing arrangements include provisions that allow the lenders or investors to accelerate repayment in the event that a related offtake contract is terminated or if certain operating thresholds or performance measures are not achieved within specified time periods. Certain of our offtake contracts and financing arrangements include, and in the future may include, provisions that would permit the counterparty to terminate the contract or accelerate maturity in the event we own, directly or indirectly, less than 50% of the combined voting power or, in some cases, if we cease to be the majority owner, directly or indirectly, of the applicable project subsidiary. The termination of any offtake contracts or acceleration of financing maturity as a result of a change-in-control event could materially and adversely affect our financial condition, results of operations and cash flows.

Our global operations are subject to complex and evolving laws, regulations, policies, trade restrictions and geopolitical risks, which could increase compliance costs, disrupt operations, delay project execution and adversely affect our business, financial condition and results of operations.

We are subject to a wide range of national, regional and local laws, regulations and policies across the markets where we do business, including energy regulations, export and import restrictions, customs rules, tariffs, antidumping and countervailing duties, tax laws, labor laws, supply chain requirements, construction and interconnection regulations, safety standards and environmental standards. These may conflict across jurisdictions and are frequently subject to change, which may increase compliance costs, disrupt operations, delay project execution, or adversely impact our ability to compete globally. We also face trade barriers and trade remedies, such as tariffs and antidumping and countervailing duties, which could increase our product costs and impact our competitiveness. See “—The antidumping and countervailing duty circumvention determinations and the extended safeguard measures in the United States could adversely affect us.”

New regulations governing safety, interconnection, environmental standards and construction may result in significant additional costs to us and our customers, which could cause a significant reduction in demand for our solar power and battery energy storage products. In addition, we face regulatory risks from transmission providers and operators, including regional transmission organizations and independent system operators. These entities may adopt or amend rules that limit transmission grid access or allocate capacity in ways that curtail the ability of solar power and battery energy storage projects to deliver power.

As we expand internationally, we face increasing exposure to diverse regulatory environments and government policies, including those that may favor domestically manufactured products or restrict international trade. Shifts in government attitudes towards free trade, tariffs, or international cooperation could adversely affect the demand for our products, increase our costs or tax liabilities, or hinder our market access.

Sustained geopolitical tensions could significantly undermine global economy stability. Hostilities and political conflicts, such as the Russia-Ukraine conflict that began in February 2022, and tensions affecting Israel, the Gaza Strip, and the Red Sea since October 2023, create global security concerns and impact international business. The duration and outcome of these factors remain highly unpredictable.

Despite our zero tolerance towards forced labor in our own manufacturing facilities and throughout our supply chain, we may be subject to risks related to forced labor allegations. We monitor our manufacturing facilities, enforce an equal opportunity policy, prohibit discrimination of any kind, and adhere to the employment laws and regulations of the jurisdictions in which we operate. In June 2021, the U.S. Customs and Border Protection issued a Withhold Release Order pursuant to Section 307 of the Tariff Act of 1930 on products whose upstream silica-based products (such as polysilicon) are sourced, or are suspected of being sourced, from Hoshine Silicon Industry Co. Ltd. and its subsidiaries. This restriction was further expanded by the Uyghur Forced Labor Prevention Act, which took effect on June 21, 2022, which imposes broader forced labor-related import restrictions. There can be no assurance that we will not experience adverse consequences arising from the impact of such restrictions on our products and supply chain.

In addition, we are subject to anti-corruption laws such as the Foreign Corrupt Practices Act of 1977 (“FCPA”), which prohibits improper payments or benefits to government officials, political parties and private-sector recipients. Although investigations and enforcement actions under the FCPA were temporarily paused for 180 days by an executive order on February 10, 2025, the FCPA law remains in effect. We may have direct or indirect interactions with officials and employees of government agencies or state-owned or affiliated entities in the course of our business (for example, to obtain approvals, permits and licenses from applicable government authorities and to sell power to government-owned entities).

If any new legislation, executive orders, tariffs, laws and/or regulations are implemented, or if existing trade agreements are renegotiated, such changes could have an adverse effect on our business, financial condition and results of operations. If we fail to comply with applicable laws, face challenges in regulations and enforcement practices, or are unable to manage associated risks effectively, our business, financial condition and results of operations could be materially and adversely affected.

Our industry is highly competitive and many of our competitors have greater resources than we do or are more adaptive.

We face intense competition from a large number of module competitors, such as First Solar, Inc., LONGi Green Energy Technology Co. Ltd., Trina Solar Limited, JinkoSolar Holding Co., Limited, JA Solar Co., Limited and Tongwei Solar Co., Ltd., and battery energy storage companies such as Tesla, Inc., Fluence Energy, Inc. and Sungrow Power Supply Co., Ltd. Some module competitors are developing or are currently producing products based on new technologies that may ultimately offer lower costs or better performance than our products. These include products based on Interdigited Back Contact (“IBC”) PV technology, which reduces shading by locating metal contacts at the cell to the rear side and increasing power density through larger area for photo absorption. To effectively compete, our products and production capacity are undergoing continuous transformation. For example, while crystalline silicon cell modules have become the market mainstream, we have significantly upgraded our production to N-type and Tunnel Oxide Passivated Contact (“TOPCon”) technologies, which is focused on further improving the photoelectric conversion efficiency and reducing the manufacturing cost. Our judgment of the development trend of technologies and products may prove inaccurate, and we may fail to invest sufficiently in research and development in the technology with the most market potential. Consequently, we may be exposed to the risk of lagging in technological advancements.

The competitiveness of our battery energy storage solutions is dependent on a number of factors, including safety and reliability, cost and performance. If we cannot effectively manage growth, take advantage of market opportunities, or respond to competitive pressures, we may face increased costs, difficulties in introducing new products, or other operating challenges.

In our project development business, we compete with international and domestic developers and operators of solar power and battery energy storage projects, including infrastructure funds, power companies focused on renewable energy generation and other renewable energy companies. Some of our competitors may have advantages over us in terms of greater experience or resources in the operation, capital, financing, technical support and management of solar power and battery energy storage projects, in any particular markets or in general.

As the solar power, battery energy storage and renewable energy industry grows and evolves, we will also face new competitors who are not currently in the market. Our failure to adapt to changing market conditions and to compete successfully with existing or new competitors would limit our growth and could have a material adverse effect on our business and prospects.

We face economic and operational risks associated with maintaining and expanding our international business.

Operating in international markets requires significant resources and exposes us to a range of risks that could adversely affect our business, including:

Our failure to manage these risks effectively could harm our international operations, overall business and results of operations.

Our revenue sources have fluctuated significantly over recent years. For example, in 2022, the Americas contributed 37.4%, Asia contributed 36.7%, and Europe and other regions contributed 25.9% of our revenues, respectively. In 2023, these regions contributed 34.4%, 41.0%, and 24.6%, respectively, and in 2024, these regions contributed 51.8%, 30.0%, and 18.2%, respectively. As we shift the focus of our operations between different regions, we have limited time to address the related risks. Furthermore, some of these risks, such as currency fluctuations, will increase as our revenue contribution from certain regions becomes more prominent. This may potentially and adversely affect our financial performance.

We may experience issues with our manufacturing capacity expansion and operational initiatives.

We have undertaken several operational initiatives to align our manufacturing capacity with market demand. Our solar module, cell, wafer and ingot annual production capacities were 60.2 GW, 48.4 GW, 31.0 GW and 25.0 GW, respectively, as of December 31, 2024. We target to adjust these capacities to 61.0 GW, 36.2 GW, 37.0 GW and 33.0 GW, respectively, by December 31, 2025, subject to market conditions. Our annual battery energy storage system manufacturing capacity was 20.0 GWh, and we had no dedicated battery cell manufacturing capacity as of December 31, 2024. We target increasing these capacities to 30.0 GWh and 3.0 GWh, respectively, by December 31, 2025.

As part of our commitment to expanding our manufacturing capabilities and supporting domestic production in the U.S., we have undertaken significant investments in new manufacturing facilities across several states. For example, in June 2023, we announced the construction of a solar module production facility in Mesquite, Texas, with an annual output capacity of 5 GW. This facility commenced production in late 2023 and is expected to serve as a key component of our U.S. supply chain. In October 2023, we announced a substantial investment in a solar photovoltaic cell manufacturing facility in Jeffersonville, Indiana. This facility will provide cells to support our U.S.-based module production and is anticipated to create a significant number of high-tech jobs. We also plan to invest in a new manufacturing and R&D hub for our utility-scale battery energy storage business in Shelbyville, Kentucky.

Even if we expand our manufacturing capacity as planned, there is no guarantee that we will be able to manage our growth effectively, generate sufficient customer demand for our products, or successfully integrate our overall manufacturing capacity to achieve operational efficiency, which could adversely affect our business, financial condition and results of operations.

The antidumping and countervailing duty circumvention determinations and the extended safeguard measures in the United States could adversely affect us.

Canadian Solar’s exports to the U.S. could be adversely impacted by (i) the U.S. Department of Commerce’s (the “USDOC”) affirmative final determinations in its circumvention investigations of crystalline silicon photovoltaic (“CSPV”) cells and modules products from Thailand and Vietnam; and/or (ii) the U.S. Government’s extension of safeguard measures on imports of CSPV cells and modules. These risks are mitigated by the Group’s compliance with USDOC’s various certification regimes.

On August 17, 2023, USDOC issued affirmative final determinations of circumvention with respect to CSPV products from Cambodia, Thailand, Malaysia, and Vietnam. USDOC also made company-specific affirmative determinations with respect to several companies, including Canadian Solar International Limited (“CSIL”). The Group defended its interests in these proceedings.

While the determination under the USDOC’s regulations typically imposes antidumping duty (“AD”) and countervailing duty (“CVD”) liability from the date of initiation (here, April 1, 2022), the USDOC published a final rule that delayed AD/CVD liability for CSIL’s exports from Thailand (and also Vietnam) in these solar circumvention proceedings (the “Solar Moratorium”) in response to Proclamation 10414 issued by the U.S. government on June 6, 2022, which suspended AD/CVD requirements on eligible product imports through June 6, 2024. To qualify for the Solar Moratorium, imports must have entered the U.S. by June 6, 2024, and be utilized in solar energy projects within 180 days of that date. USDOC also implemented a certification mechanism for exporters and importers to demonstrate that merchandise is not subject to circumvention requirements in light of (i) the Solar Moratorium, or (ii) limited reliance on Chinese-origin components (including wafers).

Accordingly, the Group’s exports from Thailand and Vietnam to the U.S. market could be treated as Chinese-origin and be subjected to significant AD/CVD deposit rates, adversely affecting our competitiveness in the U.S., and harming our financial condition and results of operations. However, the Group’s compliance with USDOC certification requirements reduces this risk.

The circumvention final determinations and Solar Moratorium are both on appeal before the U.S. Court of International Trade (“CIT”). The Group is defending its interests in these ongoing appeals. For additional details, please refer to “Item 8. Financial Information—A. Consolidated Statements and Other Financial Information—Legal and Administrative Proceedings.”

In addition, the U.S. government extended the solar safeguard measure for four years until February 6, 2026. The extended solar safeguard measure applies to nearly all U.S. imports of CSPV cells and modules, including imports from Thailand and Vietnam, and doubles the volume of the tariff-rate quota (“TRQ”) on imported CSPV cells to 5.0 GW and maintains a tariff on imports of CSPV modules and above-quota CSPV cells, beginning at a rate of 14.75% ad valorem and declining annually by 0.25 percentage points to 14.50% in the sixth year, 14.25% in the seventh year, and 14.0% in the eighth year. The extended safeguard measure excluded bifacial panels. In addition, the extended safeguard measure no longer applies to imports of CSPV cells and modules from Canada, as a result of a memorandum of understanding between the U.S. and Canada. On June 21, 2024, the U.S. government issued Proclamation 10779, revoking the exclusion of bifacial panels from safeguard relief previously proclaimed in Proclamation 10339. Proclamation 10779 instead reinstated tariffs on bifacial panels under the Section 201 Safeguard Action, subject to certain qualifications. In addition, on August 12, 2024, the U.S. government issued a Proclamation expanding the TRQ for imported solar cells from 5 GW to 12.5 GW annually. While the extended safeguard measure are scheduled to end on February 6, 2026, any further revisions could impact our ability to compete in the U.S. market and materially affect our financial condition and results of operations.

The antidumping and countervailing duty investigations on active anode materials from China and tariff measures on battery imports from China into the United States could adversely affect us.

On December 18, 2024, the American Active Anode Material Producers (“Petitioner”) filed petitions for AD/CVD orders on imports of active anode materials from China. Certain Canadian Solar entities entered an appearance in these proceedings before the USDOC and the U.S. International Trade Commission (the “USITC”). On January 15, 2025, the USDOC initiated the Active Anode Materials AD/CVD investigations, and the USITC preliminarily voted to continue its investigations on February 7, 2025. The USDOC’s AD/CVD preliminary determinations are expected in mid-2025, and if affirmative, the USITC’s final determinations are expected in late 2025. This case has the potential to adversely impact our exports of lithium batteries from China, including batteries for energy storage projects. The Group is defending its interests in these proceedings.

Additionally, on September 18, 2024, the U.S. Trade Representative (the “USTR”) announced its decision to increase the rate of existing section 301 duties on U.S. imports of lithium-ion non-electrical vehicle batteries from 7.5% ad valorem to 25% effective January 1, 2026.

These ongoing investigations and tariff measures may result in higher costs, reduced competitiveness, or limitations on our battery imports from China into the U.S., which could materially and adversely affect our business, financial condition, and results of operations.

Reciprocal tariffs under the International Emergency Economic Powers Act on imports into the United States could adversely affect us.

On February 1, 2025, the U.S. government issued an Executive Order pursuant to the International Emergency Economic Powers Act (the “IEEPA”) imposing a 10% tariff on all imports from China, effective February 4, 2025. On March 3, 2025, the U.S. government amended the Executive Order increasing the tariff to 20%, effective March 4, 2025. The 20% tariff applies in addition to any other duties, fees, exactions, and charges applicable to the covered imports from China.

On April 2, 2025, the U.S. government issued an Executive Order pursuant to IEEPA imposing an indefinite reciprocal 10% tariff on almost all goods imported into the U.S., effective April 5, 2025, and individualized higher IEEPA tariffs (11% to 50%) starting April 9, 2025 on goods originating from 57 countries with trade surpluses with the U.S., including China, Thailand, and Vietnam, among other countries. On April 9, 2025, the U.S. government issued a further Executive Order increasing the IEEPA reciprocal tariff on China to 125% effective April 10, 2025. Concurrently, the U.S. government announced a temporary suspension of the country-specific reciprocal tariff measures targeting most U.S. trading partners for a 90-day period, or until July 9, 2025. This sequence of actions underscored a strategic recalibration of the U.S. trade policy, emphasizing heightened pressure on international trade.

We are closely monitoring potential changes in international trade policy, as it remains unclear what additional actions, if any, will be taken by the U.S. or other governments with respect to international trade agreements, the imposition of tariffs on goods imported into the U.S., tax policy related to international commerce, or other trade matters. If any new tariffs, legislation and/or regulations are implemented, or if existing trade agreements are renegotiated or, in particular, if the U.S. government takes retaliatory trade actions due to the recent U.S.-China trade tension, such changes could have an adverse effect on our business, financial condition and results of operations.

Our revenues and results of operations are subject to significant fluctuations, which make our financial performance difficult to predict.

Our revenues and results of operations have historically fluctuated and are likely to continue fluctuating from quarter to quarter and year to year due to a number of factors, many of which are beyond our control. Factors contributing to these variations include, among others, changes in the average selling prices of our solar modules, fluctuations in shipment volume and customer demand, timing of revenue recognition for battery energy storage products and services, timing and pricing of project sales, loss or addition of significant customers, availability of government incentives, regulatory changes, and variations in manufacturing and material costs, including high-purity silicon, lithium cells, solar cells and wafers. We also experience seasonality in demand linked to construction cycles and weather conditions. Moreover, besides seasonality, there are many other factors that may affect our customers’ order patterns, including expectations of future price movements, inventory adjustments, grid-connection and offtaker deadlines, government policy changes and tariff adjustments. These factors may reduce or strengthen the impact of seasonality on our products and services.

As we scale our battery energy storage business, we may enter into turnkey EPC contracts and commit to a fixed project price based on preliminary cost estimates. If actual costs exceed our estimates due to unforeseen factors such as material price increases, supply chain shortages or labor constraints, we may be unable to recover those costs, which could negatively impact profitability. Delays or performance issues involving third parties may also result in penalties or additional obligations. These factors contribute to fluctuations in our revenues and results of operations.

We are exposed to fluctuations in foreign currency exchange rates. While the majority of our sales and cash are denominated in U.S. dollars, Renminbi and Euros, we also transact in various other currencies. A significant portion of our manufacturing costs are denominated in Renminbi, making us particularly sensitive to its appreciation against the U.S. dollars and other currencies. Such appreciation could increase our operating expenses and impact our cost competitiveness. In addition, we maintain loans in multiple currencies, including Renminbi, U.S. dollars, Japanese yen, Brazilian reals and Euros, further exposing us to exchange rate volatility. Although we engage in hedging activities to mitigate near term foreign exchange risk, these hedges may not fully offset the longer-term impact of foreign currency fluctuations.

In addition, we base our operating expenses in part based on expected future revenues, and a significant portion of those expenses are fixed in the short-term. If actual revenues are lower than we expected, we may not be able to adjust our operating expenses proportionately. As a result, our financial performance may continue to fluctuate significantly, and historical results should not be relied upon as an indicator of future performance.

Furthermore, our financial results and effective tax rates could change due to shifts in the mix of profits earned in countries with different tax rates, changes in the valuation of our deferred tax assets and liabilities, adjustments to provisional taxes upon finalization of various tax returns, adjustments to the interpretation of transfer pricing standards, the availability of tax credits, or changes in tax laws or interpretations, including tax holidays or tax incentives. Recent developments include international tax reforms proposed by the Organization for Economic Co-operation and Development (“OECD”) as part of its Base Erosion and Profit Shifting (“BEPS”) project. These include the allocation of profits among tax jurisdictions in which companies do business and the implementation of a global minimum tax rate of 15%, referred to as Pillar One and Pillar Two, respectively. Several countries have enacted or are in the process of implementing Pillar Two legislation, including Canada, which enacted such legislation on June 20, 2024, implementing a 15% global minimum tax on profits, effective January 1, 2024. The OECD and participating countries continue to issue administrative guidance on its applications, which may impact our tax obligations. In the U.S., the IRA included provisions that will impose, among others, a minimum tax on the book income of certain large corporations. Pending further regulatory guidance, these changes could increase our future tax liabilities.

We need a significant amount of cash to fund manufacturing expansion, project development and construction.

Our manufacturing and project development businesses are capital intensive, and we anticipate that our capital requirements will continue to increase. To develop new products, support growth, improve production cost efficiencies, and maintain product quality, we need to invest in manufacturing capacity, facilities, equipment, product and process technology. In addition, significant cash resources are required for the development and construction of our solar power and battery energy storage projects. In 2020, CSI Solar raised RMB 1.78 billion ($261.3 million) from institutional investors and strategic partners. In 2023, it raised RMB 6.91 billion ($966.9 million) from public investors in connection with its STAR Listing on the Shanghai Stock Exchange. In 2024, an entity managed by BlackRock invested $500.0 million in Series A Preferred Shares of Recurrent Energy B.V., providing additional capital for our project development business.

If we are unable to generate sufficient cash flows, obtain adequate funding, or find alternative sources of capital on commercially acceptable terms, our ability to expand manufacturing operations and project development business would be significantly impaired. This could have a material and adverse effect on our business prospects, financial condition, liquidity and results of operations.

Our substantial indebtedness and reliance on short-term financing could limit our financial flexibility and competitive position.

As of December 31, 2024, our total debt was approximately $5.1 billion. Our substantial indebtedness increases our vulnerability to adverse economic and industry conditions, and requires significant cash flow for debt service, thereby reducing funds available for working capital, capital expenditures and other general corporate purposes. These obligations could limit our financial flexibility to respond to business changes, pursue business opportunities we believe to be desirable, or compete effectively against competitors that have less debt. In addition, restrictive covenants in our debt agreements may constrain our ability to incur additional debt, further constraining financial flexibility.

Our ability to generate sufficient cash to satisfy our outstanding and future debt obligations depends on future operating performance, which is affected by economic conditions and other factors beyond our control. If we are unable to generate sufficient cash flow from operations to service our indebtedness, we may need to take alternative measures that may include actions such as reducing or delaying capital expenditures, selling assets, restructuring or refinancing our debt, or seeking equity capital. There is no assurance that these measures could be instituted on satisfactory terms, if at all. Any of these events could materially and adversely affect our ability to manage our debt obligations, which could materially and adversely affect our business, financial condition and results of operations.

We also rely on short-term borrowings, letters of credit and short-term notes payable to provide working capital for our daily manufacturing operations. Since a significant portion of these financings come from PRC banks, we are exposed to lending policy changes by the PRC banks. As of December 31, 2024, we had outstanding short-term borrowings of $1,389.7 million, letters of credit of $184.5 million and short-term notes payable of $637.5 million with PRC banks. If PRC government policies shift or PRC banks tighten lending practices, particularly in the solar sector, we may not be able to roll-over our bank credit facilities or obtain additional short-term financing. This could constrain our ability to fund operations to the same extent as in previous years, which may materially and adversely affect our operations.

Failure to comply with financial and other covenants in our debt instruments could adversely affect our liquidity.

Many of our debt instruments contain financial covenants and broad default provisions, including interest and debt coverage ratios, loan to equity value of designated projects and debt to asset ratios, and minimum equity requirements. These covenants could restrict our ability to respond to market conditions, meet capital needs and pursue growth plans. Adverse economic conditions or industry changes may cause us to incur significant losses or force us to assume considerable liabilities, which could impair our ability to comply with these covenants. If we fail to comply and our lenders refuse to grant waivers, an event of default could be triggered, which may accelerate repayment obligations under the applicable debt instruments.

Some of our debt agreements also contain cross-default clauses that enable lenders to declare an event of default if we breach covenants under other debt agreements. Our ability to meet these restrictive financial ratios and covenants can be impacted by events beyond our control and we may be unable to do so. If we are unable to cure violations or obtain waivers of non-compliance in a timely manner, we may face significant liquidity constraints, which could materially and adversely affect our financial condition and results of operations.

Supply chain disruptions, cost increases or performance issues could adversely affect our business and relationship with customers, particularly given our dependence on a limited number of key suppliers.

We rely on third-party suppliers for key materials, components and equipment, including high-purity polysilicon, ingots, wafers, cells, metallic pastes, glass, aluminum frames, ethylene vinyl acetate, junction boxes, polymer back sheets, lithium iron phosphate battery cells, inverters, trackers, mounting hardware, and grid interconnection equipment. Given our dependence on a limited number of suppliers, we are vulnerable to supply chain disruptions. If suppliers fail to meet our quantity, quality or cost requirements, we may face increased costs, production delays, or non-compliance with customer agreements, potentially leading to order cancellations, contractual liabilities, and revenue shortfalls.

Supply chain risks are further exacerbated by inflationary pressures, rising input costs, and production delays, which could impact our ability to remain price-competitive. Although we may build buffer inventories, there is no assurance that these buffer inventories will fully mitigate disruptions. In addition, a significant portion of our manufacturing and suppliers’ manufacturing and supply chain are based in China, and may be subject to government-mandated facility closure as a consequence of energy shortage or other causes. Supply interruptions may also result from accidents, natural disasters or other unforeseen events beyond our control.

If we are unable to secure alternative suppliers on commercially reasonable terms, or if increased costs cannot be passed on to our customers, our market position, customer relationships and results of operations could be materially and adversely affected.

We are developing and commercializing higher conversion efficiency cells, but we may not be able to mass-produce these cells in a cost-effective way, if at all.

Higher efficiency cell structures are increasingly vital for cost competitiveness and brand recognition in the solar power industry, as they can yield higher power outputs at the similar production costs, thereby lowering the cost per watt. Manufacturing and selling modules made from such cells offer a competitive advantage, enabling system owners to generate more electricity without additional infrastructure or systems.

We have focused our research on advanced technologies, including N-type Heterojunction (“HJT”) and TOPCon cells, and other technologies such as interdigitated back contact (“IBC”) cell. In mid-2022, we launched HJT module products for high-end roof-top application. In early 2023, we began mass production of TOPCon modules. While we are investing in the development of higher conversion efficiency solar modules, there is no assurance that we will be able to commercialize these technologies cost-effectively, if at all. In the near term, products with such technologies may command a modest premium. In the longer term, if competitors are able to manufacture these products more cost-effectively, we may experience a competitive disadvantage, which could affect our product pricing and our financial performance.

Defects or performance issues in our products could result in warranty claims that could impose significant costs on us.

We may incur significant costs due to warranty claims if our products fail to perform as expected or are alleged to have defects. Our standard warranties cover defects in materials and workmanship for periods ranging from 1 to 30 years, depending on the product type. Additionally, we provide performance warranties ensuring a specified power output over time. Given these extended warranty periods, we are exposed to the risk of substantial claims long after product shipment and revenue recognition.

While we conduct rigorous quality testing, our products have not been operational for their full warranty durations, and unforeseen issues may arise over time, potentially harming our reputation and financial results. Furthermore, as we expand and diversify our product offerings, our exposure to warranty and product liability may increase. Although we maintain reserves for warranty expenses based on various factors, actual costs may differ significantly from our estimates, leading to unexpected volatility in our results of operations.

We have historically entered into agreements with a group of insurance companies to cover a portion of our solar module warranty obligations. The insurance policies were designed to match our solar module product warranty terms, and the insurance companies were obliged to reimburse us for actual product warranty costs, subject to claim limits and deductibles. However, warranty claims may exceed coverage limits, and the claims process can be lengthy and uncertain, with outcomes that may not align with our expectations. If claims are delayed, disputed, or denied, our results of operations could materially and adversely affected.

Our dependence on a limited number of customers may cause significant fluctuations or declines in our revenues.

We sell a substantial portion of our solar module and battery energy storage products to a limited number of customers. Our top five customers by revenues accounted for approximately 15.9%, 15.8% and 17.8% of our net revenues in 2022, 2023 and 2024, respectively. We expect our dependence on a limited number of customers to continue for the foreseeable future.

The loss or reduction in sales to any major customer, if not replaced in a timely manner, could materially reduce our revenue and affect our results of operations. As we expand our business and product offerings, our customer base may shift, and there is no assurance that we will establish a stable or diversified customer base.

Our founder, Dr. Shawn Qu, has substantial influence over our company and his interests may not be aligned with the interests of our other shareholders.

As of January 31, 2025, Dr. Shawn Qu, our founder, Chairman, President and Chief Executive Officer, beneficially owned 13,973,893 common shares, representing 20.9% of our outstanding shares. Dr. Qu also serves as the chairman of CSI Solar. As a result, Dr. Shawn Qu has substantial influence over our business, including decisions regarding mergers and acquisitions, consolidations, asset sales, the election of directors and other significant corporate actions. This concentration of ownership may discourage, delay, or prevent a change in control of our company, which could deprive our other shareholders of an opportunity to receive a premium for their shares in the sale of our company and might reduce the price of our common shares.

Our inability to protect our intellectual property rights or defend against patent infringement or other intellectual property claims, could undermine our competitive position, adversely affect our business and impose significant costs.

We retain intellectual property rights to some of the technologies that we develop in solar power and battery energy storage products, As of December 31, 2024, we held 2,215 patents and had 560 patent applications pending in China, 19 U.S. patents (including 7 design patent), and 16 European patents (including 12 design patents). We have registered the “Canadian Solar” trademark in multiple jurisdictions, with pending application in additional countries. As of December 31, 2024, we had 138 registered trademarks and 4 trademark applications pending in China, and 162 registered trademarks and 34 trademark applications pending outside of China. While we take measures to protect our intellectual property, these rights afford only limited protection and may not prevent third-party infringement.

Additionally, our success depends on our ability to develop and use our technology and know-how without infringing third-party intellectual property rights. Patent and intellectual property disputes are inherently uncertain and often involve complex legal, scientific, and factual issues. Defending such claims can be costly, time-consuming and may divert management and technical resources. Furthermore, we use third-party equipment in our production lines, sometimes without sufficient supplier guarantees that our use of such equipment does not infringe third-party intellectual property rights. This creates a potential source of litigation or infringement claims. An adverse determination in any such litigation or proceedings to which we may become a party could subject us to significant liability, require us to seek licenses, pay ongoing royalties, redesign products or comply with injunctions prohibiting the manufacture, sale or use of our technologies. Protracted litigation could deter customers from purchasing our products until disputes are resolved. While we have resolved claims and disputes in the past without material impact on our financial position, we cannot guarantee that future disputes will not have a material adverse effect on our business and results of operations.

Our failure to comply with environmental, health and safety laws could result in significant costs, adverse publicity, fines and business disruption.

We are subject to national and local laws governing environmental protection, health and safety. We believe we comply with all applicable regulations, including those related to noise, wastewater, air emissions, hazardous substances and industrial waste. Beyond what is required by environmental laws, we have implemented measures to reduce our environmental impact, including promoting a circular economy to maximize material and energy efficiency and minimize waste generation, and setting rolling five-year targets to lower manufacturing GHG emissions, energy and water consumption, and waste generation. We have also strengthened supplier scrutiny on ESG requirements and implemented ESG compliance audits across our supply chain. If we fail to comply with current or future environmental regulations, we may incur substantial fines, production suspensions or operation closures. Stricter regulations in the future could significantly increase compliance costs. Our solar power and battery energy storage products must meet environmental standards in the jurisdictions in which they are installed, and compliant-related design and manufacturing costs could impact our competitiveness.

The ownership, construction and operation of our solar power and battery energy storage projects are subject to environmental, health and safety laws in each jurisdiction where our projects operate or plan to operate. Some projects may require environmental impact assessments and programs to identify and understand the potential environmental impacts of our operations, allowing us to plan and design projects that minimize harm to ecosystems and communities. If such programs are unsuccessful, our projects could face increased mitigation requirements, operational curtailments, penalties or permit revocation.

Our costs of complying with current and future environmental, health and safety laws, regulations and permit requirements (or other similar requirements), and any liabilities, fines or other sanctions resulting from violations, could have a material adverse effect on our business and results of operations.

Laws, regulations and government actions on sustainability and greenhouse gas emissions could result in significant additional costs and expose us to additional liabilities.

Our operations emit greenhouse gases, and evolving laws and regulations may require us to obtain permits, undergo environmental review, and implement monitoring programs. For instance, the SEC adopted rules on March 6, 2024, mandating public companies to disclose climate-related risks and GHG emissions in their annual reports starting in the fiscal year 2025. However, the implementation of these rules has been stayed due to legal challenges, and as of March 27, 2025, the SEC ceased defending the rules in court, creating uncertainty regarding their future applicability. The European Corporate Sustainability Reporting Directive (“CSRD”) requires companies to report on a broad range of ESG factors. A central feature of the CSRD is the concept of double materiality, which mandates companies to identify sustainability matters that are most material to the organization and its stakeholders. Recent legislative developments have led to proposed amendments that may delay the implementation of the CSRD’s reporting requirements. On April 3, 2025, the European Parliament voted to postpone the application of certain sustainability reporting rules, allowing lawmakers additional time to renegotiate exemptions. As a result, reporting requirements for certain companies are postponed until 2027, with first reports due in 2028. Given these developments, we are closely monitoring the evolving regulatory landscape to determine the specific impact on Recurrent Energy’s reporting obligations under the CSRD. In China, regulatory authorities have recently introduced ESG disclosure guidelines requiring public companies to report on material ESG topics, including the integration of double materiality assessments. CSI Solar, our majority-owned subsidiary listed on the STAR Market, will be required to comply with these guidelines by April 30, 2026, for disclosures covering the fiscal year 2025.

Since 2020, we have been measuring GHG emissions from our operations, including manufacturing. We have also set rolling five-year targets to reduce GHG emissions, energy and water consumption, and waste intensity, which are updated annually. Our commitment includes the goal of powering all our operations with renewable energy by 2030. In addition, we are committed to setting science-based near-term and net-zero targets and decarbonizing our operations and value chain. These initiatives will meaningfully reduce our GHG emissions in the future, and may be subject to policy, market or cost barriers in the locations where we operate.

Our business model supports global decarbonization by enabling customers to reduce their carbon footprint through solar energy and battery energy storage solutions. However, evolving carbon pricing mechanisms, emission regulations, and government decarbonization targets could increase our compliance costs, impact operations, or require additional investments in emission reduction equipment and technologies. The financial and operational impact of such regulatory developments remains uncertain and cannot yet be determined.

Corporate sustainability may impose additional costs and create new compliance challenges.

Public ESG and sustainability reporting has become more broadly expected by investors, shareholders, customers and other stakeholders. Investors and customers may consider a company’s sustainability performance as a reputational or other factor in making an investment or purchase decision. Our failure to meet established ESG standards or achieve acceptable ratings could lead to reputational damage, increased costs, and potential disadvantage relative to our competitors.

We actively monitor sustainability-related key performance indicators, and have set meaningful targets to ensure that we manage our business in a responsible way and maintain a responsible supply chain. See “Item 4. Information on the Company—B. Business Overview—Environmental, Social and Governance Initiatives.” However, implementing our sustainability strategy may result in increased costs and could have a material adverse effect on our business and results of operations. In addition, evolving sustainability standards may impose more stringent requirements on us and our suppliers. As such, there is no certainty that we will be able to meet our sustainability or other objectives efficiently and in a timely manner, if at all.

Interruption, security breaches or failures of information technology, control and communication systems could disrupt our business and expose us to liability.

We rely on our information technology systems and network infrastructure, some of which are managed by third parties, to process, store and transmit electronic information. Our information technology systems and those of critical third-party providers are vulnerable to cybersecurity incidents, including power outages, system failures, unauthorized access, malware, ransomware, data breaches and other cyber threats. Despite security measures, we have experienced cyber-attacks in the past and we expect attacks and security incidents to increase in the future. In addition, cyber treats targeting the energy and infrastructure sectors continue to increase in frequency and sophistication. We cannot guarantee that our defenses and those of critical third-party providers will prevent cybersecurity incidents, detect intrusions in a timely manner or enable full recovery. Cybersecurity breaches may lead to data theft, loss or misuse of proprietary and personal information, exposing us to legal claims, regulatory penalties, compliance costs and significant financial and reputational damage. Our cybersecurity costs may increase as regulatory requirements evolve and the threat landscape expands. If we fail to adequately prevent, detect, or mitigate cybersecurity threats, our business, operations, and financial results could be materially and adversely affected.

In addition, evolving global data protection laws impose compliance burdens. Regulations such as the EU GDPR and Canada’s Québec Privacy Act require companies handling personal data to meet stringent security and privacy standards. Noncompliance may result in fines, operational restrictions, legal claims and heightened regulatory scrutiny.

Given the growing complexity of cybersecurity threats and regulatory obligations, we may need to allocate significant financial and operational resources to enhance data protection and ensure compliance. If we fail to prevent or mitigate cybersecurity incidents, or comply with evolving data protection laws, our business, reputation and financial condition may be materially and adversely affected.

Weaknesses in our internal control over financial reporting could undermine investor confidence and adversely affect the value of our common shares.

As a public company, we are required by Section 404 of the Sarbanes-Oxley Act to include a management report on, among other things, the effectiveness of our internal control over financial reporting in our annual report. As of December 31, 2024, management concluded that our internal control over financial reporting was effective. Our independent registered public accounting firm will also evaluate and report on the effectiveness of our internal control over financial reporting. However, we cannot guarantee that material weaknesses will not emerge in the future. Any such weaknesses could lead to delays in our periodic reporting, material misstatements in our financial statements, and a loss of investor confidence, leading to an adverse effect in the value of our common shares.

Although we completed the STAR Listing, we may not achieve the results contemplated by our business strategy. In addition, it is difficult to predict the effect of the STAR Listing on our common shares.

Although we completed the initial public offering and listing of CSI Solar (the “STAR Listing”) on the Science and Technology Innovation Board (the “STAR Market”) of the Shanghai Stock Exchange on June 9, 2023, we may not realize the anticipated benefits. Our completion of the STAR Listing may not have the anticipated effects of strengthening CSI Solar and our market leadership position. CSI Solar has broad discretion over the use of the proceeds from the STAR Listing, and it may not spend or invest those proceeds in a manner that results in our operating success or with which holders of our common shares agree. Our failure to leverage the STAR Listing could adversely impact our results of operations and market value of our common shares.

In addition, CSI Solar is currently subject to the listing and securities law regime of the PRC, resulting in increased legal, accounting and other compliance costs that it did not incur as a private company. The stock exchanges in China and Nasdaq have different trading hours, trading characteristics (including trading volume and liquidity), trading and listing rules, and investor bases, including different levels of retail and institutional participation. As a result of these differences and given the fact that CSI Solar will remain one of our significant subsidiaries, fluctuations in the price of the shares of CSI Solar due to circumstances peculiar to the STAR Market or otherwise could in turn affect the price of our common shares. Furthermore, investors may choose to invest directly in CSI Solar rather than our shares listed on the Nasdaq Global Select Market, which could result in reduced demand and market value for our common shares.

CSI Solar’s status as a publicly traded company that is controlled, but less than wholly owned, may create complexities and adversely affect our financial results.

As of December 31, 2024, we owned 63.14% of CSI Solar’s outstanding shares. While we retain majority ownership, CSI Solar operates under a separate board of directors and officers whose fiduciary duties extend to all of its shareholders. In fulfilling these duties, they may take actions that may be contrary to our best interests. CSI Solar and our company are independently listed on the Shanghai Stock Exchange and the Nasdaq Global Select Market, respectively, and are subject to differing regulatory, accounting standards (PRC GAAP for CSI Solar and U.S. GAAP for our company) and disclosure requirements. These differences may create inconsistencies in financial reporting, timing of disclosures and investor communications, which may lead to potential confusion or uncertainty among investors.

In addition, CSI Solar may undertake capital raises, share repurchases and share-based compensation for its directors, officers and employees, which could dilute or increase our ownership interest, affect cash flows, and increase share-based compensation expenses in the future. For example, on February 27, 2024, CSI Solar announced a share repurchase program of up to RMB 1 billion ($140.8 million), primarily for employee stock ownership plans and equity incentives. According to CSI Solar’s announcement on November 30, 2024, CSI Solar plans to implement a share repurchase program with an amount not exceeding RMB 1 billion ($140.8 million). The repurchased shares will be canceled to reduce the company’s registered capital. In 2024, CSI Solar repurchased 52.7 million shares, representing 1.43% of its total shares, for RMB 566.2 million ($79.6 million). In the first quarter of 2025, it repurchased an additional 14.3 million shares for RMB 153.5 million ($21.6 million).

We have granted, and may continue to grant, various share-based incentive awards which may increase our share-based compensation expenses.

Under our 2006 share incentive plan, we grant restricted shares, options and restricted share units to eligible employees, directors and consultants. In connection with the STAR Listing, we granted performance-based restricted share units to directors and key employees, with vesting tied to the IPO date and subsequent anniversaries. See “Item 6 Directors, Senior Management and Employees—B. Compensation of Directors and Executive Officers” for more details. CSI Solar adopted a restricted share incentive plan in 2024, granting options to its officers, directors and employees to purchase shares of CSI Solar, subject to service and performance vesting conditions. We recognized $21.4 million in share-based compensation expenses in 2024.

We consider share-based compensation critical for attracting, retaining and motivating key personnel and expect to continue issuing such share-based incentive awards. However, these grants may increase our share-based compensation expenses. In addition, performance-based awards may cause greater period over period fluctuations compared to time-based awards.

We may encounter difficulties with acquisitions and divestitures, which could harm our business.

We have completed several acquisitions in the past and may continue to acquire additional business in the future to improve our market position, expand our products and services, or achieve other business objectives. However, these activities could subject us to a number of risks, including challenges associated with integrating the acquired operations, personnel, services, internal controls and financial reporting into our existing operations. If we fail to successfully integrate acquisitions, it could result in disruptions to our business operations, loss of key personnel, or failure to realize anticipated synergies or other benefits. Divestitures also involve significant risks, such as difficulties in finding buyers on acceptable terms and within a reasonable timeframe, and agreed terms could be renegotiated due to changes in business or market conditions. Divestitures could adversely affect our profitability and may require us to record impairment charges or losses as a result of the transaction.

There can be no assurance that we will be able to make acquisitions and investments and successfully integrate them into our operations, or establish strategic relationships with third parties that will prove to be effective for our business or make divestitures. Our inability to do so could materially and adversely affect our market penetration, our revenue growth and our profitability.

We face risks related to private securities litigation.

There is no guarantee that we will not become party to lawsuits from time to time. If we were involved in a class action suit, it could divert significant attention and resources from our business and operations, and require us to incur significant expenses to defend the suit. In addition, we are generally obligated, to the extent permitted by law, to indemnify our directors and officers in such matters. Adverse outcomes in such litigation could lead to significant judgments or settlements that materially and adversely affect our financial condition or results of operations.

Our common shares may be prohibited from trading in the United States under the HFCAA in the future if it is later determined that the PCAOB is unable to inspect or investigate completely our auditor. The delisting or prohibition of trading of our common shares, or the threat of their being delisted or prohibited from trading, may materially and adversely affect the value of your investment.

Pursuant to the HFCAA as amended by the Consolidated Appropriations Act, 2023, if the SEC determines that we have filed audit reports issued by a registered public accounting firm that has not been subject to inspection by the Public Company Accounting Oversight Board, or the PCAOB, and that we are a Commission-Identified Issuer under the HFCAA for two consecutive years, the SEC will prohibit our common shares from being traded on a national securities exchange or in the over-the-counter trading market in the U.S. In the event of such determination, the Nasdaq is expected to delist our common shares.

On December 16, 2021, the PCAOB issued a report to notify the SEC its determinations that it was unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong. Our auditor, Deloitte Touche Tohmatsu Certified Public Accountants LLP, an independent registered public accounting firm located in China, was subject to that determination.

On May 26, 2022, we were conclusively identified as a “Commission-Identified Issuer” under the HFCAA following the filing of our annual report on Form 20-F for the fiscal year ended December 31, 2021. On December 15, 2022, the PCAOB issued a report that vacated its previous determinations issued on December 16, 2021 and removed mainland China and Hong Kong from the list of jurisdictions where it is unable to inspect or investigate completely registered public accounting firms. Therefore, our auditor is currently able to be fully inspected and investigated by the PCAOB. For this reason, we were not identified as a Commission-Identified Issuer under the HFCAA after we filed our annual report on Form 20-F for the fiscal year ended December 31, 2022, and do not expect to be so identified when we file this annual report on Form 20-F for the fiscal year ended December 31, 2024. Until such time as the PCAOB issues any new determination, we do not expect our securities to be subject to a trading prohibition under the HFCAA. On February 21, 2025, the U.S. administration undertakes, among other things, to determine if adequate financial auditing standards are upheld for companies covered by the HFCAA.

However, it is uncertain whether the PCAOB will continue to be able to satisfactorily inspect and investigate registered public accounting firms in mainland China and Hong Kong, among other jurisdictions. If in the future, PCAOB finds that it is unable to completely inspect and investigate registered public accounting firms in mainland China and Hong Kong, the PCAOB may act immediately to consider the need to issue a new determination, and we may be identified as a Commission-Identified Issuer again. In accordance with the HFCAA as amended by the Consolidated Appropriations Act, 2023, our securities would be prohibited from being traded on a national securities exchange or in the over-the-counter trading market in the U.S. if we are identified as a Commission-Identified Issuer for two consecutive years. Furthermore, we cannot assure you whether Nasdaq or regulatory authorities would apply additional and more stringent criteria to us after considering the effectiveness of our auditor’s audit procedures and quality control procedures, adequacy of personnel and training, or sufficiency of resources, geographic reach or experience as it relates to the audit of our financial statements. In addition, any additional actions, proceedings, or new rules resulting from these efforts to increase U.S. regulatory access to audit information could create some uncertainty for investors, adversely affect the market price of our ordinary shares, and we could be delisted if we and our auditor are unable to meet the PCAOB inspection requirement or are required to engage a new audit firm, which would require significant expense and management time. The delisting or prohibition of trading of our common shares, or the threat of their being delisted or prohibited from trading, may materially and adversely affect the value of your investment. If our common shares are prohibited from trading in the United States, there is no certainty that we will be able to list on a non-U.S. exchange or that a market for our shares will develop outside of the United States. A prohibition of being able to trade in the United States would substantially impair your ability to sell or purchase our common shares when you wish to do so, and the risk and uncertainty associated with delisting would have a negative impact on the price of our common shares. Also, such a prohibition would significantly affect our ability to raise capital on terms acceptable to us, or at all, which could have a material adverse impact on our business prospects and financial condition.

Risks Related to Doing Business in China

The rules and regulations in China can change quickly with little advance notice. Uncertainties with respect to the PRC legal system, as well as changes in any government policies, laws and regulations, could affect our industry and our ability to conduct our operations in China, which could harm our business.

We conduct a significant portion of our operations through our subsidiaries in China, which are governed by PRC laws and regulations. The rules and regulations in China can change quickly with little advance notice.

The PRC legal system, based on written statutes, differs from common law systems, as prior court decisions may be cited for reference but have limited precedential value. The PRC legal system continues to rapidly evolve and the implementation, interpretation and enforcement of its laws, regulations and rules may be inconsistent and change quickly with little advance notice, which may limit legal protections available to us. In addition, any litigation in China may be protracted and may result in substantial costs and divert our resources and the attention of our management. Moreover, because these laws and regulations are subject to varying interpretations, their application in practice may evolve over time as new guidance becomes available.

The new Company Law, which came into effect on July 1, 2024, introduces substantial changes affecting various aspects of corporate operations in China, including capitalization, corporate governance and shareholder rights. This law also defines the duties of directors, supervisors and senior management, and imposes greater liabilities on them. If we fail to address and comply with these regulations and any subsequent changes, we may be subject to penalties and our business may be harmed.

On March 15, 2019, the National People’s Congress issued the Foreign Investment Law, which replaced most of the laws and regulations previously governing foreign investment in China. On December 26, 2019, the State Council issued the Implementation Rules of Foreign Investment Law. The Foreign Investment Law and its Implementation Rules both took effect on January 1, 2020, unifying the regulatory framework for both foreign and domestic investments. According to these regulations, foreign investments shall be conducted in line with the “negative list” and obtain relevant approvals issued by the State Council from time to time. The “negative list” sets special administrative measures for foreign investment access in specific industries. Foreign investors are not allowed to invest in prohibited industries as specified in the “negative list.” Foreign investors must comply with certain conditions when investing in the restricted industries as specified in the “negative list.” The National Development and Reform Commission (“NDRC”) and the Ministry of Commerce (“MOFCOM”) jointly issued the Catalogue of Encouraged Industries for Foreign Investment (2022 Edition), which includes photovoltaic power generation equipment manufacturing as an encouraged industry. However, it is uncertain whether our PRC subsidiaries will be subject to future foreign investment restrictions or prohibitions, although they are not currently subject to such restrictions under the existing “negative list.” We cannot assure you that future interpretation or implementation of the Foreign Investment Law by relevant authorities will not materially impact our corporate structure, governance, industry or business operations.

Furthermore, with the trend of strengthening anti-monopoly supervision around the world, the PRC government has promulgated new anti-monopoly and competition laws and regulations and strengthened the enforcement under these laws and regulations, paying more attention to corporate compliance. On February 7, 2021, the Anti-monopoly Commission of the State Council issued the Guidelines for Anti-monopoly in the field of Platform Economy, which require anti-monopoly review for concentrations of undertakings involving variable interest entities in internet industry. On November 15, 2021, the State Administration for Market Regulation issued the Guidelines for the Overseas Anti-monopoly Compliance of Enterprises. Although we believe these regulations have little impact on our business, there remain uncertainties regarding their interpretation and enforcement. We cannot guarantee that regulators will agree with us or that our business operations comply with such regulations and authorities’ requirements in all respects. If any non-compliance is raised by relevant authorities and determined against us, we may be subject to fines and other penalties.

The PRC government has exercised and continues to exercise substantial control over the economy. It may intervene in or influence the operations of our PRC subsidiaries at any time, which could result in material changes to our operations and the value of our securities.

We conduct our business in China through PRC subsidiaries in which we hold equity ownership interests. The PRC government has exercised and continues to exercise substantial control over the economy through regulation and state ownership. Our subsidiaries’ ability to operate in China may be impaired by changes in its laws and regulations, including those governing our industry, taxation, land use rights and foreign investment restrictions. The PRC government may intervene in or influence the operations of our PRC subsidiaries at any time, which could result in a material adverse change in our operations and the value of our securities.

The central or local governments may impose new or stricter regulations or reinterpret existing regulations that would require additional compliance measures and costs. As such, our PRC subsidiaries may be subject to various government actions and regulatory interference at the national, provincial and municipal levels, leading to increased operational costs or penalties for non-compliance.

Future government actions, including intervention or regulatory changes, may require significant changes to the operations of our PRC subsidiaries, which could result in a material change in the value of our securities. Consequently, our business and investors face ongoing uncertainties related to PRC government policies and actions.

Any actions by the PRC government to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of our securities to significantly decline or be worthless.

The PRC government has recently indicated an intent to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers. Any such action could significantly limit or completely hinder our ability to offer or continue to offer securities to investors, and cause the value of such securities to significantly decline or be worthless.

According to the Filing Measures which came into effect on March 31, 2023, a PRC domestic company that seeks to directly or indirectly offer and list securities in overseas markets are required to file with the CSRC. In addition, follow-on offerings or listings in overseas markets, including issuance of shares, convertible notes and other similar securities, shall be filed with the CSRC within a specified time frame under the Filing Measures. In addition, upon the occurrence of any material event, such as change of control, investigations or sanctions imposed by overseas securities regulatory agencies or other relevant competent authorities, change of listing status or transfer of listing segment, or voluntary or mandatory delisting, after an issuer has offered and listed securities in an overseas market, the issuer shall submit a report thereof to CSRC within three working days after the occurrence and public disclosure of such event. Therefore, we will be required to submit filings to the CSRC in the event that we conduct any subsequent securities offerings, including issuance of shares, convertible notes and other similar securities.

On February 24, 2023, the CSRC, the Ministry of Finance, the National Administration of State Secrets Protection and the National Archives Administration of China jointly issued the Provisions on Strengthening Confidentiality and Archives Administration of Overseas Securities Offering and Listing by Domestic Enterprises which took effect on March 31, 2023. These provisions extend the scope of application to overseas indirectly listed enterprises. To provide or publicly disclose to the relevant individuals or entities, including securities companies, securities service providers and overseas regulators, or to provide or publicly disclose, through its overseas listing entities, any documents or materials that contain state secrets or working secrets of government agencies, a PRC domestic enterprise shall strictly fulfill relevant procedures stipulated by applicable national regulations, and when providing documents and materials to the relevant securities companies and securities service providers, a PRC domestic enterprise shall first obtain approval from the competent authorities according to the law, file with the secrecy administrative department at the same level and provide the relevant securities companies and securities service providers with a written statement on the implementation of the relevant requirements of this provision. A PRC domestic enterprise shall fulfill due procedures in compliance with applicable national regulations, if it provides accounting archives or copies of accounting archives to any relevant individuals and entities, including securities companies, securities service providers and overseas regulators.

If PRC regulatory authorities, including the CSRC, determine that future approvals or filings are required for our securities offerings, there is uncertainty whether we can, or how long it may take to, obtain such approval or complete such filing procedures. Any failure or delay in obtaining such approval or completing the required filings for our future offerings may subject us to sanctions by the CSRC or other PRC regulatory authorities, which could include fines and penalties on our operations in China, limitations on our operating privileges in China, delays or restrictions on repatriating offering proceeds into China, and limitations on or prohibition of dividend payments by our subsidiaries in China. The CSRC or other PRC regulatory authorities may also take actions requiring us, or making it advisable for us, to halt an offering before the settlement and delivery of our common shares. Consequently, investors engaging in market trading or other activities in anticipation of settlement and delivery would do so at the risk that such settlement and delivery may not occur. If the CSRC or other regulatory agencies promulgate new rules or guidelines requiring that we obtain their approvals or complete additional filing or regulatory procedures for future offerings, we may be unable to obtain waivers for these new requirements. Any regulatory action, uncertainty or negative publicity regarding approval, filing or other compliance requirements could materially and adversely affect our business, reputation, prospects, financial condition, results of operations, and the trading price of our common shares.

Failure to comply with PRC regulations and other legal obligations concerning cybersecurity, privacy, data protection and informational security may materially and adversely affect our business, as we routinely collect, store and use data during the conduct of our business.

We routinely collect, store and use data during our operations including but not limited to the demand and pricing of solar and battery energy storage products, electricity prices and forecasts, location and capacity of our production facilities, operational and performance data of solar and battery projects that we provide services to or own, and the information related to our employees, customers and suppliers, both within and outside China. We are subject to PRC laws and regulations governing the collecting, storing, sharing, using, processing, disclosure and protection of data on the internet, mobile platforms and cybersecurity. These PRC laws apply not only to third-party transactions, but also to transfers of information between us and our PRC subsidiaries and other parties in China with which we have commercial relations.

The State Council issued the Regulations on Protection of Critical Information Infrastructure, which became effective on September 1, 2021. Pursuant to the regulations, critical information infrastructure shall mean any important network facilities or information systems of an important industry or field, such as public communication and information service, energy, communications, water conservation, finance, public services, e-government affairs and national defense science, which may endanger national security, peoples’ livelihoods and public interest in the event of damage, function loss or data leakage. In addition, relevant administration departments of each critical industry and sector shall be responsible to formulate eligibility criteria and determine the critical information infrastructure operator in the respective industry or sector. The operators shall be informed about the final determination as to whether they are categorized as critical information infrastructure operators. Among these industries, the energy and telecommunications industries ae mandated to take measures to provide key assurances for the safe operation of critical information infrastructure in other industries and fields.

In addition, the Standing Committee of the National People’s Congress issued the Personal Information Protection Law, which became effective from November 1, 2021 and requires personal information processing operators, among other regulatory requirements, to obtain a personal information protection certification issued by recognized institutions in accordance with the CAC regulation before such personal information can be transferred out of China.

The CAC issued the Cybersecurity Review Measures, which became effective on February 15, 2022. Under these measures, online platforms and network providers possessing personal information of more than one million individual user must undergo a cybersecurity review by the CAC when they seek listing in foreign markets. The Measures provide that critical information infrastructure operators purchasing network products and services and data processors carrying out data processing activities, which affect or may affect national security, shall apply for cybersecurity review to the cyberspace administrations in accordance with the provisions thereunder.

On January 3, 2025, the CAC issued the Measures for the Certification of Personal Information Protection for Cross-Border Data Transfers (Draft for Comments). The draft measures apply to activities related to the certification of personal information protection for cross-border data transfers conducted within China. The draft measures outline provisions regarding the definition, scope of application, certification procedures, and filing requirements for professional certification bodies involved in personal information protection certification for outbound personal information transfer.

On September 24, 2024, the State Council promulgated the Regulations on Network Data Security Administration, which came into effect on January 1, 2025. These regulations provide more detailed guidance on how to implement the general legal requirements under legislations such as the Cybersecurity Law, Data Security Law and the Personal Information Protection Law. The Regulations on Network Data Security Administration requires that network data processors conducting data processing activities that affect or may affect national security shall undergo a national security review in accordance with relevant national regulations. Measures for the Security Assessment of Outbound Data Transfers promulgated by the CAC took effect on September 1, 2022 and the provisions in the Guide to Applications for Security Assessment of Outbound Data Transfers (Second Edition) took effect on March 22, 2024. According to the rule, a data processor is required to apply to the national cyberspace administration for security assessment of outbound data transfer through local provincial cyberspace administration, if the data processor provides important data abroad. The rule is recently adopted, and it is not certain how the CAC will interpret and enforce it. If we are required to go through a security assessment of outbound data transfer, we will receive a notice on assessment result after completion of the assessment, and we may be notified to terminate the outbound data transfer or make rectification as required. In addition, we have to regulate our outbound data transfer activities in accordance with the applicable laws and regulations on the security management of outbound data transfer and the relevant requirements specified in the notice on assessment result.

As of the date of this annual report, we have not been informed that we are identified as a critical information infrastructure operator by any governmental authorities. We will closely monitor the relevant regulatory environment and will assess and determine whether we are required to apply for the cybersecurity review with the advice of our PRC counsel.

Changes in PRC tax benefits may increase our effective tax rate and adversely affect our results of operations.

The Enterprise Income Tax Law (“EIT Law”), which took effect on January 1, 2008, and was further amended on February 24, 2017 and December 29, 2018, stipulates that both foreign-invested enterprises and domestic enterprises are subject to a statutory enterprise income tax rate of 25%. The EIT Law provides preferential tax treatment for certain categories of industries and projects supported and encouraged by the government. For example, enterprises qualified as a “High and New Technology Enterprise” (“HNTE”) are entitled to a 15% enterprise income tax rate, provided they satisfy applicable statutory requirements. In addition, under the Catalogue of Encouraged Industries in Western Regions (“Western Catalogue”) promulgated by the NDRC, Enterprises in the Encouraged Industry that are established in the western region are entitled to a 15% enterprise income tax rate, subject to satisfying applicable statutory requirements.

In 2024, certain of our PRC subsidiaries, including Suzhou Sanysolar Materials Technology Co., Ltd, Changshu Tegu New Material Technology Co., Ltd, CSI New Energy Development (Suzhou) Co., Ltd, CSI Solar Technologies (JiaXing) Co., Ltd, Canadian Solar Photovoltaic Technology (Luoyang) Co., Ltd. and CSI Energy Storage Co., Ltd. were recognized as HNTEs. In addition, CSI Solar Technology (Xining) Co., Ltd and Canadian Solar Sunenergy (Baotou) Co., Ltd. were qualified as Enterprises in the Encourage Industry.

Our effective tax rate depends on the relative contribution of each of subsidiary to our consolidated taxable income. The future income tax liability of our PRC subsidiaries will depend on various factors such as the results of their operations, taxable income and applicable statutory or preferential enterprise tax rate. If our PRC subsidiaries that have enjoyed preferential tax treatment lose their eligibility, we will explore options under applicable law to qualify for alternative preferential tax treatment. To the extent we are unable to offset the impact of the expiration of existing tax benefits through new tax exemptions, incentives or other benefits, our effective tax rate may increase.

There are significant uncertainties regarding our tax liabilities with respect to our income under the EIT Law.

Under the EIT Law and its implementation regulations, enterprises established outside China whose “de facto management body” is located in China are considered PRC tax resident enterprises and will be subject to a 25% enterprise income tax rate on their global income. The implementation regulations define the term “de facto management body” as the body that exercises full and substantial control and overall management over business, productions, personnel, accounts and properties of an enterprise. The Circular on Certain Issues Relating to the Identification of China-controlled Overseas-registered Enterprises as Resident Enterprises on the Basis of Actual Management Organization, or Circular 82, effective from January 1, 2008, further provides certain specific criteria for determining whether the “de facto management body” of a PRC-controlled offshore incorporated enterprise is located in the PRC. The criteria include whether (a) the location where senior management and senior management bodies responsible for the routine production and business management of the enterprise is located in the PRC, (b) decisions relating to the enterprise’s financial and human resource matters are made or are subject to approval by organizations or personnel in the PRC, (c) the enterprise’s primary assets, accounting books and records, company seals, and board and shareholder resolutions are located or maintained in the PRC and (d) 50% or more of voting board members or senior executives of the enterprise habitually reside in the PRC. Although Circular 82 only applies to offshore enterprises controlled by enterprises or enterprise groups located within the PRC, the determining criteria set forth in Circular 82 may reflect the tax authorities’ general position on how the “de facto management body” test may be applied in determining the tax resident status of offshore enterprises. As of the date of this annual report, we have not been notified or informed by the PRC tax authorities that we are considered a PRC resident enterprise under the EIT Law.

However, it remains unclear as to whether our “de facto management body” is located in China for PRC tax purposes. As a result, we and our non-PRC subsidiaries may be treated as tax residents in the PRC, which could increase our tax liabilities.

Dividends paid by us to and gains on the sale of our securities by our non-PRC shareholders may be subject to PRC enterprise or individual income tax liabilities.

The EIT Law and its implementation regulations provide that if the enterprise distributing dividends is domiciled in the PRC, or if gains are realized from transferring equity interests of enterprises domiciled in the PRC, such dividends or capital gains shall be treated as China-sourced income. However, there are no detailed rules for determining the criteria or procedures for an enterprise to be considered “domiciled” in the PRC. Domicile may be interpreted as either the jurisdiction where the enterprise is incorporated or where the enterprise is a tax resident. If we are considered a PRC “resident enterprise” for tax purposes, dividends we pay to our non-PRC shareholders and gain realized by such shareholders from the transfer of our securities could be considered as income derived from sources within China and be subject to a PRC tax at a rate of 10% (withheld at source for dividends), unless reduced or eliminated under an applicable tax treaty.

Under the Individual Income Tax (“IIT Law”), individual income tax is payable on PRC-sourced dividend income. The IIT Law and its implementation regulations provide that dividend income derived from companies, enterprises and other economic organizations in China, as well as income from transfer of properties in China, is considered derived from sources inside China, regardless of whether the place of payment was inside China. Therefore, if we are classified as a PRC tax resident enterprise for purposes of the IIT Law, any dividends we pay to our non-PRC individual shareholders and gains realized by our non-PRC individual securities holders on the transfer of our securities may be regarded as PRC-sourced income and, consequently, be subject to PRC tax at a rate of up to 20% (withheld at source for dividends). While applicable tax treaties may reduce such PRC taxes, it remains unclear whether non-PRC security holders would be able to obtain tax treaty benefits in practice.

As a result, PRC taxation on dividends and capital gains may materially and adversely affect investment returns for our non-PRC security holders.

Renminbi currency exchange restrictions may limit our ability to utilize our revenues and cash effectively.

The PRC government regulates Renminbi convertibility into other currencies and, in certain cases, restricts the remittance of currency out of China in cross-border transactions and capital flows. Certain of our revenues and expenses are denominated in Renminbi. If our revenues denominated in Renminbi increase or our expenses denominated in Renminbi decrease, we may need to convert a portion of our revenues into other currencies to meet foreign currency obligations.

Under the relevant foreign exchange regulations, conversion of Renminbi for current account transactions, which includes dividends, interest, trade and service-related foreign exchange transactions, is permitted without prior approval from SAFE by complying with certain procedural requirements.

Conversion of Renminbi for capital account transactions, including foreign direct investments and loans, is subject to significant foreign exchange controls and requires approval of or registration with PRC authorities. If we finance our PRC subsidiaries through capital contributions, approval of or the record-filing with PRC authorities, including the Ministry of Commerce or its local counterparts, is required. If our PRC subsidiaries obtain foreign debt through medium and long-term loans or bonds issuance, approval may be required from the NDRC. Foreign exchange controls on capital account transactions could limit our PRC subsidiaries’ ability to obtain foreign exchange, pay capital expenses in currencies other than in Renminbi or use Renminbi capital converted from foreign registered capital, including through loans or capital contributions from us.

The PRC government may impose stricter foreign exchange policies and increase scrutiny of cross-border capital movements. If these restrictions prevent us from utilizing our revenues generated in Renminbi or cash held in China to meet cash or financing requirements outside China or to pay future dividends, our business could be harmed.

Risks Related to Our Common Shares

The issuance by us of additional common shares or equity-linked securities may cause existing shareholders to experience dilution and could adversely affect the market price of our common shares.

From time to time, we may issue additional common shares or equity-linked securities for a number of reasons, including to finance our operations and business strategy (including in connection with acquisitions, strategic collaborations or other transactions), to satisfy our obligations for the repayment of existing indebtedness, to adjust our ratio of debt to equity, or for other reasons. For example, in August 2024, we entered into an agreement with PAG for a private placement of $200.0 million in secured convertible notes, subject to closing conditions, pursuant to which a $50.0 million tranche was issued in early 2025. These notes are convertible into common shares at an initial conversion price of $18.20. Future issuances of such securities may cause existing shareholders to experience dilution of their ownership interest and may adversely affect the market price of our common shares. We cannot predict the timing, size or terms of any future issuances or sales of common shares or equity-linked securities, nor their effects on the market price of our common shares. In additional, market conditions could require us to accept less favorable terms in future offerings.

The market price of our common shares is highly volatile.

The market price for our common shares is highly volatile and has been subject to wide fluctuations, which could result in substantial losses to investors. In 2024, our share price fluctuated between a high of $25.74 and a low of $10.76. The stock market in recent years has experienced significant price and volume fluctuations that have affected the market prices of companies, including solar companies. These fluctuations have often been unrelated to or disproportionately impacted by the operating performance of these companies. The market for our common shares has been and may in the future be subject to similar volatility. Factors such as fluctuations in our operating results, announcements of technological innovations or events affecting other companies in the solar industry, currency fluctuations, general market fluctuations, and macro-economic conditions may cause the market price of our common shares to decline.

Your right to participate in any future rights offerings may be limited, which may cause dilution of your holdings.

We may from time to time distribute rights to our shareholders, including rights to acquire our securities. However, we cannot make these rights available in the U.S. unless we register the rights and the securities to which the rights relate under the Securities Act or an exemption from the registration requirements is available. We are under no obligation to file a registration statement with respect to any such rights or securities or to endeavor to cause a registration statement to be declared effective. Moreover, we may not be able to establish an exemption from registration under the Securities Act. Accordingly, you may be unable to participate in our rights offerings and may experience dilution in your holdings.

Our articles contain certain provisions that may adversely affect the rights of holders of our common shares.

Certain provisions in Canadian Solar Inc.’s articles may deprive our shareholders of the opportunity to sell their common shares at a premium over the prevailing market price by delaying or preventing a change of control of our company:

You may have difficulty enforcing judgments obtained against us.

Canadian Solar Inc. is a corporation governed by the laws of the province of Ontario, Canada, with operations in North America, Asia Pacific, Europe, Australia, South America, the Middle East and Africa. We primarily conduct our manufacturing operations in China, Southeast Asia and the United States. A majority of our directors and officers are nationals and residents of countries other than the United States (principally Canada, mainland China and Hong Kong) and a substantial portion of the assets of these persons are located outside the United States. As a result, it may not be possible for you to effect service of process within the United States upon those persons. Furthermore, it may not be possible for you to enforce against us or them, in the United States, judgments obtained in United States courts, because all or a substantial portion of our assets and the assets of those persons are located outside the United States.

In addition, there is uncertainty as to whether courts of Canada or the PRC would recognize or enforce United States court judgments against us or such persons predicated upon the civil liability provisions of the securities laws of the United States or any state. In addition, it is uncertain whether such courts of Canada or the PRC would be competent to hear original actions brought in Canada or the PRC against us or such persons predicated upon the securities laws of the United States or any state.

If a United States person owns at least 10% of our shares, such person may be subject to adverse United States federal income tax consequences.

If a United States person is treated as owning (directly, indirectly or constructively) at least 10% of the value or voting power of our shares, such person may be considered as a “United States shareholder” with respect to each “controlled foreign corporation,” or CFC, in our group. Where our group includes one or more United States subsidiaries that are corporations for United States federal income tax purposes, in certain circumstances we could be treated as a CFC and certain of our non-United States subsidiaries could be treated as CFCs (regardless of whether or not we are treated as a CFC).

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A United States shareholder of a CFC may be required to annually report and include in its United States taxable income its pro rata share of “Subpart F income,” “global intangible low-taxed income” and investments in United States property by CFCs, whether or not we make any distributions. An individual who is a United States shareholder with respect to a CFC generally would not be allowed certain tax deductions or foreign tax credits that would be allowed to a corporation that is a United States shareholder. A failure to comply with these reporting obligations may subject a United States shareholder to significant monetary penalties and may prevent starting of the statute of limitations with respect to such shareholder’s United States federal income tax return for the year for which reporting was due. We do not intend to monitor whether we are or any of our non-United States subsidiaries is treated as a CFC or whether any investor is treated as a United States shareholder with respect to us or any of our CFC subsidiaries, or to furnish to any United States shareholders information that may be necessary to comply with the aforementioned reporting and tax obligations. An investor who is a United States person should consult its tax advisor regarding the potential application of these rules to its particular circumstances.

We may be classified as a passive foreign investment company, which could result in adverse United States federal income tax consequences to United States Holders of our common shares.

We will be a passive foreign investment company, or PFIC, for United States federal income tax purposes in any taxable year if, applying applicable look-through rules, either (a) at least 75% of our gross income for such year is passive income or (b) at least 50% of the value of our assets (generally determined based on an average of the quarterly asset values for such year) is attributable to assets that produce or are held for the production of passive income. Based on the value of our assets and the nature and composition of our income and assets, we do not believe we were a PFIC for the taxable year ended December 31, 2024, though there can be no assurances in this regard. PFIC status is determined annually, involves extensive factual analysis, including ascertaining the quarterly fair market value of all of our assets and the characterization of each item of income that we earn, and is subject to various uncertainties. Moreover, we cannot guarantee that the IRS will agree with any positions that we take. Accordingly, we cannot assure you that we will not be treated as a PFIC in any taxable year or that the IRS will not take a position contrary to any position that we take.

Changes in the value of our assets and/or the nature or composition of our income or assets may cause us to be more likely to be a PFIC. The determination of whether we are a PFIC for any taxable year may also depend in part upon the value of our goodwill and other unbooked intangibles not reflected on our balance sheet (which may depend upon the market value of our common shares from time to time, which may be volatile) and also may be affected by how, and how quickly, we spend our liquid assets and cash generated from our operations. Among other matters, if our market capitalization declines, we may be more likely to be a PFIC because our liquid assets and cash (which are for this purpose considered assets that produce passive income) may then represent a greater percentage of the value of our overall assets. Further, while we believe our classification methodology and valuation approach are reasonable, it is possible that the IRS may challenge our classification or valuation of our goodwill and other unbooked intangibles, which may result in our being or becoming a PFIC for the current taxable year or one or more future taxable years.

If we are classified as a PFIC in any taxable year during which a United States Holder (as defined in “Item 10. Additional Information—E. Taxation—United States Federal Income Taxation”) holds our common shares, that holder could be subject to adverse United States federal income tax consequences. See “Item 10. Additional Information—E. Taxation—United States Federal Income Taxation—Passive Foreign Investment Company.”

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ITEM 4   INFORMATION ON THE COMPANY

Canadian Solar Inc. was incorporated under the laws of the Province of Ontario, Canada in October 2001. We became a publicly traded company on the Nasdaq under the ticker symbol “CSIQ” following our initial public offering (“IPO”) on November 9, 2006. Since incorporation, we have undergone several jurisdictional changes, as approved by shareholders:

Canadian Solar Inc. is now governed by the Business Corporation Act (Ontario), or the OBCA.

In 2020, we raised RMB 1.78 billion ($261.3 million) to position CSI Solar for its planned carve-out IPO in China and bring in leading institutional investors and strategic partners. In 2021, we conducted an “at-the-market” (ATM) offering program, through which we sold 3,639,918 common shares, raising $150.0 million in gross proceeds.

In June 2023, CSI Solar completed its STAR Listing on the Shanghai Stock Exchange, raising gross proceeds of RMB 6.01 billion ($842.6 million). In July 2023, the full over-allotment option was exercised, raising an additional gross proceeds of RMB 0.9 billion ($124.3 million). All U.S. dollar equivalents are based on the exchange rate on the respective transaction dates. CSI Solar issued 622,217,324, representing approximately 17% of its outstanding shares post-IPO. As of the date of this annual report, we own a 63.1% equity interest in CSI Solar.

In January 2024, Canadian Solar Energy Group B.V. and Recurrent Energy B.V., our subsidiaries, entered into a purchase and sale agreement with GRP IV UK Holdco Limited (“GRP IV”), which is managed by BlackRock, Inc.’s climate infrastructure business (“BlackRock”) to issue Series A preferred shares of Recurrent Energy B.V. (“Series A Preferred Shares”) to GRP IV. GRP IV subsequently assigned its rights, liabilities and obligations under the agreement to GRP IV Rose Bidco Ltd. (“Investor”), an affiliated entity that is also managed by BlackRock. Following initial and subsequent closings in May and September 2024, respectively, BlackRock’s total investment reached $500.0 million, representing 20% of Recurrent Energy B.V.’s fully diluted shares on an as-converted basis as determined immediately upon closing. See “Item 4. Information on the Company—B. Business Overview—Recurrent Energy Key Development.”

For details on our corporate structure and significant subsidiaries, see “—C. Organizational Structure.”

Our principal executive office and principal place of business is located at 4273 King Street East, Suite 102, Kitchener, Ontario, N2P 2E9, Canada. Our telephone number at this address is 1-519-837-1881 and our fax number is 1-519-837-2550. Our agent for service of process in the United States is CT Corporation System, located at 111 Eighth Avenue, New York, New York 10011.

All inquiries to us should be directed to the address and telephone number of our principal executive office set forth above. Our website is www.canadiansolar.com. The information contained on or accessible through our website does not form part of this annual report.

Overview

We are one of the world’s largest solar technology and renewable energy companies, a leading manufacturer of solar photovoltaic modules, a provider of battery energy storage solutions, and a developer of utility-scale solar power and battery energy storage projects. Our global footprint spans North America, Asia Pacific, Europe, Australia, South America, the Middle East and Africa. Our business is divided into two segments: CSI Solar, which focuses on solar module and battery energy storage product manufacturing, and Recurrent Energy, which focuses on solar power and battery storage project development, asset sales, power services, and electricity revenue from its operating portfolio.

CSI Solar

CSI Solar primarily designs, develops and manufactures solar ingots, wafers, cells, modules and battery energy storage products. We operate manufacturing facilities in China, Southeast Asia and the United States.

We employ a flexible vertically integrated business model that combines internal manufacturing capacity with direct material purchases of ingots, wafers and cells. We believe this approach has benefited us by allowing us to grow in a capital-light manner, while giving us significant flexibility to respond to short-term demand changes. Our solar module, cell, wafer and ingot annual production capacities were 60.2 GW, 48.4 GW, 31.0 GW and 25.0 GW, respectively, as of December 31, 2024. We target to adjust these capacities to 61.0 GW, 36.2 GW, 37.0 GW and 33.0 GW, respectively, by December 31, 2025, subject to market conditions. Our annual battery energy storage system manufacturing capacity was 20.0 GWh, and we had no dedicated battery cell manufacturing capacity as of December 31, 2024. We target increasing these capacities to 30.0 GWh and 3.0 GWh, respectively, by December 31, 2025.

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We believe that we offer one of the most comprehensive crystalline silicon solar power product lines in the industry, encompassing modules with medium to high power outputs. Our products include advanced N-type TOPCon modules. These modules are designed for use across residential, commercial, industrial, and utility-scale solar power generation systems. We market our solar modules under the “Canadian Solar” brand to distributors, system integrators, project developers, and EPC companies worldwide.

Our e-STORAGE provides integrated utility-scale battery energy storage solutions, including turnkey and bankable system solutions across various applications, long-term service agreements, and future battery capacity augmentation services. As of December 31, 2024, e-STORAGE had a total project turnkey pipeline of approximately 79 GWh, comprising contracted projects, projects under construction, and those at various stages of negotiation, and 4.9 GWh of contracted battery energy storage projects under long-term service agreements. The contracted backlog, including long-term service agreements, was approximately $3.2 billion as of December 31, 2024.

In 2022, we introduced SolBank, our propriety lithium iron phosphate (“LiFePO4”) battery system designed for utility-scale applications. In 2023, we introduced SolBank 3.0, featuring a 5 MWh capacity, an active balancing battery management system (“BMS”), advanced liquid cooling and humidity control, and compliance with the latest international safety and compliance standards.

In 2022, we also introduced EP Cube, our residential battery energy storage product in the U.S., and have since expanded to new markets, including Europe and Japan.

Recurrent Energy

Recurrent Energy primarily develops, builds, sells, and operates solar power and battery energy storage projects, while also providing power services (O&M) and asset management. Prior to the rebranding of the Recurrent Energy segment, we referred to this segment as Global Energy until April 2023.

Recurrent Energy develops solar power and battery energy storage projects globally, including in North America, Europe, Latin America, Japan, Australia, and other countries of the Asia-Pacific region. As of December 31, 2024, our total global solar development pipeline stands at 24.9 GWp, including 1.9 GWp under construction, 4.2 GWp of backlog, and 18.8 GWp of projects in advanced and early-stage development stages. Our battery storage development pipeline stands at 75.1 GWh, including 9.9 GWh under construction and in backlog, and 65.2 GWh of projects in advanced and early-stage development stages. As of December 31, 2024, our operating portfolio had a total net capacity of approximately 2,120 MWp of solar power and 1,809 MWh of battery energy storage. In 2024, we managed approximately 13 GW of projects under O&M contracts.

We focus on capturing greater asset value and retaining ownership of projects in select markets to increase long-term revenues through recurring income, primarily from the sale of electricity and other related services generated by our operating portfolio.

Recurrent Energy Key Development

In January 2024, Canadian Solar Energy Group B.V. and Recurrent Energy B.V., our subsidiaries, entered into a purchase and sale agreement with GRP IV UK Holdco Limited (“GRP IV”), which is managed by BlackRock, Inc.’s climate infrastructure business (“BlackRock”) to issue Series A preferred shares of Recurrent Energy B.V. (“Series A Preferred Shares”) to GRP IV. GRP IV subsequently assigned its rights, liabilities and obligations under the agreement to GRP IV Rose Bidco Ltd. (“Investor”), an affiliated entity that is also managed by BlackRock. The expected purchase and sale transaction has been completed following an initial closing in May 2024 and a subsequent closing in September 2024. As agreed between the parties, with these closings, BlackRock’s total investment has reached $500.0 million, representing 20% of the outstanding fully diluted shares of Recurrent Energy B.V.’s fully diluted shares on an as-converted basis as determined immediately upon closing.

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Dividends

Pursuant to the transaction documents, either (a) Recurrent Energy shall, to the extent permitted by law and specifically authorized and declared by Recurrent Energy’s board of directors in respect of a given calendar quarter, pay in cash to the holders of Series A Preferred Shares dividends in respect of each outstanding Series A Preferred Share at a per annum rate equal to 9% of the Stated Value of such share or (b) to the extent of any portion of the dividend not paid in cash, such amount will automatically be added to the Stated Value of the Series A Preferred Shares. Amounts added to the Stated Value as described above (“Accretion Amounts”) will continue to accrue at the same 9% annual rate and compound on a quarterly basis, subject to certain adjustments. The “Stated Value” referred to above generally represents the original purchase price of the Series A Preferred Shares plus the compounded Accretion Amounts plus any accumulated preferred return that has not been paid in cash or added to the Stated Value as an Accretion Amount and is determined as of each calendar quarter. Subject to the foregoing, the transaction documents place limitations on the payment of dividends absent the unanimous approval of the shareholders.

Voting Rights

The holders of the Series A Preferred Shares are generally entitled to vote, on an as-converted basis, on all matters upon which holders of ordinary shares have the right to vote in the general meeting of Recurrent Energy (voting together as a single class with the holders of the ordinary shares of Recurrent Energy). Holders of the Series A Preferred Shares are entitled to appoint one director to the board of Recurrent Energy. So long as any Series A Preferred Shares are outstanding, the prior written consent of any holders of at least 60% of the Series A Preferred Shares will be required before Recurrent Energy or its subsidiaries take certain actions.

Liquidation Events

The Series A Preferred Shares rank senior to Recurrent Energy’s ordinary shares with respect to rights upon the voluntary or involuntary liquidation, dissolution or winding up of Recurrent Energy or upon a deemed liquidation event (collectively, a “Liquidation Event”). Deemed liquidation events include, among other events, a sale of 50% or more of the assets of Recurrent Energy or a merger, consolidation, equity sale or similar transaction involving the transfer of beneficial ownership of 50% or more of the voting power or economic interest of the outstanding capital stock of Recurrent Energy, subject to certain limitations (a “Company Sale”), and the occurrence of an Exit Demand (as defined below).

Upon a Liquidation Event, the holders of Series A Preferred Shares then outstanding shall be entitled to be paid out of the assets of Recurrent Energy available for distribution to its shareholders, or otherwise received by shareholders in connection with such Liquidation Event, before any payment shall be made to the other shareholders, an amount per Series A Preferred Share equal to the greater of (i) 1.3 times the Stated Value, and (ii) such amount distributable per ordinary share had all Series A Preferred Shares been converted into ordinary shares immediately prior to such Liquidation Event (the “Preferred Liquidation Amount”). If the assets of Recurrent Energy available for distribution to its shareholders shall be insufficient to pay the full Preferred Liquidation Amount, the holders of Series A Preferred Shares shall share ratably in any distribution of the assets available for distribution.

Exit Rights

At any time on or after the fifth anniversary of the first closing (i.e., May 31, 2024), Investor shall be entitled to cause Recurrent Energy to use commercially reasonable efforts to effect (1) a Company Sale resulting in proceeds in respect of the Series A Preferred Shares equal to at least the Preferred Liquidation Amount (an “Investor Exit”) or (2) a qualified primary public offering of the ordinary shares of Recurrent Energy (an “IPO”), by delivering a written notice (an “Exit Request”) to Recurrent Energy. If an Investor Exit or qualified IPO is not consummated within two years of the delivery of an Exit Request, Investor shall have the right to cause Recurrent Energy and its affiliates to effect an Investor Exit or qualified IPO (an “Exit Demand”). In the event of the closing of an IPO, all outstanding Series A Preferred Shares shall automatically be converted into a number of ordinary shares of Recurrent Energy equal to the greater of (i) the original liquidation preference of the Series A Preferred Shares divided by the conversion price in effect at such time and (ii) 1.3 times the Stated Value divided by the fair market value of such shares, with such fair market value being deemed to be equal to the public offering price per share disclosed in the final prospectus for such IPO.

The original liquidation preference shall initially be equal to the purchase price, subject to adjustment for share splits, share dividends or returns, reverse splits, combinations, recapitalizations and similar transactions. The conversion price shall initially be equal to the purchase price, subject to anti-dilution adjustment as provided in the terms of the Series A Preferred Shares.

Redemption and Conversion Rights

On and after the five-year anniversary of the first closing (or an earlier Exit Demand pursuant to an ESG Default in accordance with the shareholders’ agreement), the Series A Preferred Shares may be redeemed, in whole or in part, at the option of Recurrent Energy upon 30 days’ prior written notice delivered to all holders of Series A Preferred Shares (an “Optional Redemption Notice”).

Following receipt of the Optional Redemption Notice, any holder of Series A Preferred Shares may elect, in its sole discretion, to convert all or any number of the shares subject to redemption into ordinary shares at the then effective conversion price, in which case Recurrent Energy shall not redeem such Series A Preferred Shares (i.e., the number of Series A Preferred Shares to be redeemed by Recurrent Energy shall be reduced by the number of Series A Preferred Shares so converted). In addition, each holder of Series A Preferred Shares shall have the option to convert all or any of its Series A Preferred Shares upon the occurrence of a Company Sale and certain other monetization events, into a number of ordinary shares of Recurrent Energy equal to the greater of (i) the original liquidation preference of the Series A Preferred Shares divided by the conversion price in effect at such time and (ii) 1.3 times the Stated Value divided by the fair market value of such shares.

Our Products and Services

We market our products primarily under our own brand names, including “Canadian Solar”, “CSI”, “CSI Solar”, “Recurrent Energy”, “e-STORAGE”, “SolBank”, “KuBank” and “EP Cube”.

CSI Solar

Solar Modules

We offer high-efficiency solar modules with power outputs ranging from 400W to over 700W, using mono-crystalline cells in various configurations. Our mainstream solar modules, include CS7N (132 half-cells, 210 mm wafer, mono facial and bifacial), CS7L (120 half-cells, 210 mm wafer, mono facial and bifacial), CS6W (144 half-cells, 182 mm wafer, mono facial and bifacial), CS6L (120 half-cells, 182 mm wafer, mono facial) and CS6R (108 half-cells, 182 mm wafer, mono facial). These are designed for residential, commercial and utility-scale applications. Among other innovations, we were pioneers in introducing module product with 166 mm wafers compared with the conventional 156.75 mm wafers, and mass producing 665W modules using 210 mm wafers.

In 2021, we expanded manufacturing capacity for the HiKu6 (182 mm wafers) and HiKu7 (210 mm wafers) series modules and invested in a pilot line for Heterojunction (“HJT”) solar cells and modules, using in-house developed N-type mono-silicon ingots and wafers. Based on our high-efficiency HJT cells, we introduced the 6R-H-AG (108 half-cells, 182 mm wafer) with module power up to 440W for the residential market. To enhance wind resistance, we introduced a mechanically enhanced version of CS3N (132 half-cells, 166 mm wafer) in 2021. With the adoption of larger wafers, we launched CS6R (108 half-cells, 182 mm wafers) in 2021, with module power reaching 420W in 2022.

We further developed N-type wafer-based TOPCon modules, integrating ingot growth, wafering, cell production, and module assembly in-house. Our TOPCon modules reinforce our technology and product leadership, enhancing system efficiency and delivering greater returns on investment for customers. Firstly, the low temperature coefficient of our TOPCon modules allows them to perform better in hot environments compared to mainstream module products. Secondly, they are not susceptible to boron-oxygen related LID (“Light Induced Degradation”), resulting in less power degradation. Thirdly, the power degradation of TOPCon modules is lower than that of PERC modules under comparable test conditions. Furthermore, TOPCon bifacial modules achieve bifaciality of up to 85%, delivering an estimated 2% power gain over PERC bifacial modules under similar field conditions.

In 2022, our TOPCon pilot cell line produced its first cells with an average cell efficiency of up to 24% and a yield over 98%. In 2023, we began delivering 182 mm and 210 mm cell based TOPCon modules. Mass production and cell efficiency later reached 25%, 1.3% higher than the average efficiency of PERC cells in the market. Our TOP(Bi)HiKu6 and TOP(Bi)HiKu7 module series include the 182 mm cell based bifacial TOPBiHiKu6, with power outputs ranging from 565W to 585W, and monofacial TOPHiKu6, with power outputs ranging from 440W to 590W, and the 210 mm cell based bifacial TOPBiHiKu7, with power outputs ranging from 630W to 705W.

In 2022, we introduced steel frame modules for our monofacial and bifacial CS6W and CS7N for utility-scale applications, reducing carbon footprint compared to aluminum frame modules. Our in-house steel frame design contains special cross-section structure to improve cost-performance efficiency.

In 2023, to meet the growing demand in commercial and industrial rooftop solar, we launched BIPV (“Building Integrated Photovoltaic”) products. Our BIPV system includes a system of components, including a customized tin roof, PV module and specially designed clamp, that offer improved aesthetics and reliability.

In 2023, we launched the TOP(Bi)HiKu6 series with 182 mm rectangular wafers (“182R”), increasing power output by approximately 5% compared with the original TOP(Bi)HiKu6 series modules. This module series improves loading capacity by approximately 8% per container, reducing logistics costs and lowering Levelized Cost of Electricity (“LCOE”). The 182R TOPCon offers cost advantages over both 182 mm PERC and 182 mm TOPCon modules. The 182R series includes four versions designed for different applications, with power outputs up to 515W and efficiency up to 22.8% for residential and small commercial and industrial (“C&I”) projects, and 620W with 23% efficiency for large-scale C&I projects and utility-scale projects.

Battery Energy Storage

Our battery energy storage solutions provide proprietary high-performance, safe and reliable energy storage for utilities, independent power producers, and commercial and industrial business. These solutions provide the balance of energy delivery with energy consumed, including absorption of excess energy in the systems and release for when it is needed, and enhance power resilience across multiple applications.

Battery energy storage demand is growing for various utility and grid opportunities and applications including energy arbitrage, reserve capacity, flexible peaking, resource adequacy, grid frequency regulation and voltage control. We have successfully introduced our high-energy and high-power storage power block with integrated LiFePO4 battery system designed to meet market demand for 1 to 4 hours of energy storage duration. We offer turn-key solution, integrating battery storage, power conversion system and energy management system, complemented by long-term service agreements, including operation and maintenance, capacity augmentation, system performance optimization, warranty, and other services throughout the system operational life. We also offer comprehensive services and capabilities with project installations, including consulting and project engineering, procurement, and construction (“EPC”) management.

To drive growth and innovation in battery energy storage, we have invested significantly into developing proprietary products, technologies, and manufacturing processes. In 2021, we began designing DC battery storage systems, including battery modules and packs, under the “SolBank” brand. In 2022, we launched the SolBank 1.0, featuring a LiFePO4 battery system for utility-scale applications, with capacity of up to 2.967 MWh. In 2023, we launched SolBank 3.0, with power up to 2.35 MW and capacity of 5 MWh. SolBank 3.0 integrates high energy density cells, advanced safety system, smart liquid cooling and active balance system controls. Housed in a 20-ft container, SolBank 3.0 provides up to 45% increase in product-level capacity and up to 40% decrease in commissioning time compared to its previous generation. SolBank 3.0 is equipped with a pack and electrical redundancy protection system, smart abnormal performance detection, multi-level fire alarm, and suppression protection, ensuring product safety. Its optimized thermal management lowers auxiliary power consumption by up to 30% compared to its previous generation. Its flexible, modular design ensures compatibility with various power conversion systems (“PCS”).

In 2022, we launched our residential battery energy storage product, EP Cube, an all-in-one residential battery energy storage solution designed to optimize solar self-consumption. Initially introduced in the U.S., it has since expanded to Europe and Japan. The EP Cube system offers scalable capacities ranging from 9.9 kWh to 19.9 kWh per unit, with full system capacity up to 119.9 kWh.

Solar System Kits

Our solar system kit is a ready-to-install package consisting of solar modules produced by us and third-party components, such as inverters, racking system and accessories. These kits cater to various applications, including residential and commercial rooftops.

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Power Electronic

We began developing residential inverters in 2017 and launched our first inverter products in 2019. Our power electronic products cover a comprehensive range of inverters tailored for residential, commercial, industrial and utility-scale solar and energy storage applications. Our product lineup include the 3-5 kW and 7-9 kW residential inverter models, the 15-25 kW, 40-60 kW and 75-125 kW C&I inverter models, the 320kW, 333kW and 350kW utility-scale inverter models, and 200kW and 215 kW models power conversion system (“PCS”) for energy storage. In 2022, we introduced our first internally developed and manufactured 3-phase string inverter for commercial and small utility-scale applications. In 2023, we launched our 1500Vdc 320 kW string inverter and 1500Vdc 200 kW string PCS products, which further enhance our offerings in the utility-scale and energy storage markets.

EPC Services

We provide turnkey EPC services in China for ground-mounted solar power and battery energy storage projects, as well as large-scale distributed systems for C&I customers. Our services encompass system design, procurement, installation, testing and commissioning.

Long-term Service Agreements (LTSA)

The LTSA, all previously executed by our e-STORAGE platform, support the long-term operation and maintenance of the battery energy storage systems, contributing to grid reliability and stability.

Recurrent Energy

Solar Power and Battery Energy Storage Asset Sales

We develop, build and sell solar power and battery energy storage projects. Our project development activities encompass site selection, land acquisition, securing interconnection, structuring PPA or similar offtake contract, obtaining permits, and managing procurement and construction. We actively pursue suitable buyers for our projects. See “—Sales, Marketing and Customers—Recurrent Energy.”

Revenue from Electricity and Battery Energy Storage Operations

We operate select solar power and battery energy storage projects, generating revenue through electricity sale and related services. The majority of electric power generated by our solar power projects is contracted under long-term PPA, VPPA, or contracts for capacity and ancillary services, with public utilities, licensed suppliers, corporate offtakers and commercial, industrial or government end users.

Power Services (O&M)

Our power services include monitoring, inspections, repair and replacement of project equipment, site management and administrative support services for projects in operation. We leverage advanced technologies such as semi-automated module washing, autonomous vegetation management, machine-learning predictive maintenance and drone inspections. We continue to enhance our service offerings with ongoing technological investments.

Supply Chain Management

CSI Solar

Our manufacturing operations depends on a stable and cost-effective supply of polysilicon, solar ingots, wafers, cells and lithium battery cells. We have entered into long-term agreements with various silicon raw material and wafer suppliers, particularly during periods of tight upstream supply. These agreements specify price, quantity, delivery terms and technical specifications. While they usually include specific price terms, most of them also incorporate upward or downward price adjustment mechanisms based on market conditions. In line with industry practice, we make advance payments without collateral for scheduled deliveries, which are credited against purchase prices. We sourced all silicon raw materials from third parties and continue to diversify our polysilicon, wafer, cell and lithium battery cell suppliers.

For risks related to the long-term supply agreements, see “Item 3. Key Information—D. Risk Factors—Risks Related to Our Company and Our Industry—Oversupply of polysilicon, solar wafers, cells and modules may cause substantial downward pressure on the prices of our products and reduce our revenues and earnings” and “ —Supply chain disruptions, cost increases or performance issues could adversely affect our business and relationship with customers, particularly given our dependence on a limited number of key suppliers.”

Recurrent Energy

Recurrent Energy procures solar modules and battery energy storage products from CSI Solar. We have centralized procurement operations to optimize project construction costs and secure competitive terms with key suppliers, enhancing our ability to compete on cost given the large procurement quantities.

Manufacturing, Construction and Operation

CSI Solar

Our solar module manufacturing process integrates automation and quality control to enhance efficiency and product consistency. We assemble modules by interconnecting solar cells by tabbing and stringing them into a desired electrical configuration, laminate them under vacuum, cure them by heating, and package them within protective lightweight anodized aluminum or steel frames to withstand the environment. We seal and weatherproof our solar modules to withstand high levels of ultraviolet radiation, moisture and extreme temperatures. Key manufacturing equipment includes automatic laminators, simulators and solar cell testers. Our flexible production lines balance automation and skilled labor to optimize efficiency.

We primarily use in-house manufactured silicon ingots, wafers, solar cells, with a portion sourced from third parties, for our solar module production. Our solar module manufacturing costs in China, including purchased polysilicon and wafers, decreased from $0.236 per watt in 2022 to $0.169 per watt in 2023, and further to $0.106 per watt in 2024. We continue to focus on cost reduction through improvements in solar cell conversion technology and efficiency, manufacturing yields and material sourcing.

Recurrent Energy

We develop, build, sell and operate solar power and battery energy storage projects across North America, Europe, Latin America, Japan, Australia, and other countries of the Asia-Pacific region. We manage all aspects of project development and operations, including site selection, design, permitting, engineering, procurement, construction and operations, utilizing in-house teams or third-party contractors based on project requirements and resource availability.

The development process for our solar power and battery energy storage projects consists of the following key stages:

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