Canadian Solar Inc. (CSIQ) announced that it has formed a joint venture and an 18 MW distribution deal with West Holding Ltd of Japan. The agreement stipulates a transfer of 14% of the shares in Canadian Solar Japan − the Japanese subsidiary of Canadian Solar Inc. − to West Holding Ltd. Canadian Solar will retain the remaining 86% stake in its subsidiary. West Holding Ltd will distribute and sell solar residential rooftop systems designed by Canadian Solar Japan. The sales target for 2010 is approximately 18 MW.
 
West Holdings Corporation and its subsidiaries develop photovoltaic systems, all electric housing, and heat reflective paints in Japan and overseas.
 
Canadian Solar is a vertically integrated manufacturer of silicon ingots, wafers, cells, solar modules (panels) and custom-designed solar power applications. The company has seven manufacturing facilities located at Suzhou, Changshu and Luoyang in China. Canadian Solar has an annual capacity of approximately 120 MW to 150 MW of ingots and wafers, 270 MW of cells, and 820 MW of modules.
 
Canadian Solar sells its products to customers spread across Germany, Spain, the U.S., France, the Czech Republic, Italy, Korea, Canada, Japan and China. The company’s standard solar modules are sold to distributors and system integrators, and specialty solar modules and products to various manufacturers, who integrate these solar modules into their own products or sell and market them as part of their own product portfolio.
 
The fortunes of Canadian Solar look greener with a geographically diversified customer base, ongoing expansion programs, subsidy program in China, improving operating efficiencies, rising margins, material cost savings through its vertically integrated production structure, higher captive generation of solar cells and higher conversion efficiency. However, apprehensions over the tepid module demand in Europe, subsidy roll-back in Germany, rising competition, credit risk from its customers, and the company’s high R&D expenses may adversely affect performance over the near-term.
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