Canadian Solar Reports Fourth Quarter and Full Year 2020 Results

GUELPH,ON,March 18,2021 -- Canadian Solar Inc.("Canadian Solar" or the "Company") (NASDAQ: CSIQ) today announced financial results for the quarter and full year ended December 31,2020.

Fourth Quarter 2020 Results

Solar module shipments of 3.0 GW at high-end of 2.9 GW to 3.0 GW guidance range.

14% sequential growth in revenue to $1,041 million exceeds guidance range of $980 million to $1,015 million.

Gross margin of 13.6% exceeds guidance of 8% to 10%.

Net income attributable to Canadian Solar of $7 million,or $0.11 per diluted share.

Full Year 2020 Highlights

32% annual growth in total module shipments to 11.3 GW,in line with guidance.

9% annual growth in net revenue to $3.5 billion.

Net income attributable to Canadian Solar of $147 million or $2.38 per diluted share.

1.4 GWp of projects sold globally in 2020 with 20 GWp solar project pipeline.

Won nearly 1 GWh of battery storage contracts. Expect to deliver and capture approximately 10% market share in the U.S. in 2021.

Nearly 9 GWh of total battery storage project pipeline.

Carve-out IPO of CSI Solar subsidiary,formerly mainly the Module and System Solutions ("MSS") business,on track.

Dr. Shawn Qu,Chairman and CEO,commented,"While 2020 was a tough year due to the pandemic,we remained focused on our long-term strategy of growth and delivered a robust set of results. Fourth quarter revenue and margins both exceeded our expectations thanks to Canadian Solar's solid foundations in product and technology innovation and strong customer relationships. This allowed us to diversify our income streams,mitigate some of the impact of near-term cost pressures and accelerate the monetization of our solar projects.

"Looking through the short-term fluctuations,we remain confident in solar energy's global growth prospects. We are at a structural turning point where solar grid parity is met with societal awareness of the urgent need to decarbonize the global economy. As a result,we are seeing a steep increase in demand for clean power assets across the world,both for solar and battery storage projects,where Canadian Solar has a competitive advantage. We have over 20 GWp of solar project pipeline and nearly 9 GWh of battery storage pipeline. We are positioned to benefit from robust growth in both areas. We have been developing our technology in system integration and go-to-market capabilities for battery storage solutions in the past few years. In 2021,we will start delivering at scale and expect to capture around 10% of the battery storage market in the U.S. alone,based on Wood Mackenzie market estimates.

"We are also on track on the carve-out IPO of CSI Solar,as we completed all targeted milestones to date. We are working on the official listing application which we expect to submit to regulatory authorities and the stock exchange in April."

Yan Zhuang,President of CSI Solar Co.,Ltd. ("CSI Solar"),Canadian Solar's subsidiary,said,"This was a challenging quarter as short-term cost pressures persisted. Polysilicon prices remained elevated in Q4 and have recently increased another 25%; inflation in most basic commodities continues; and the U.S. Dollar,Euro,Japanese Yen and other currencies continue to depreciate relative to the Chinese Renminbi,hurting our margin. Our team has done an excellent job working with our customers and partners who were able to share a portion of the higher costs. On a positive note,while we expect further volatility,we have seen certain costs such as solar glass prices starting to come down,and early signals of normalizing shipping costs.

"As solar transitions from a subsidy-driven to a market-driven industry,we need to fundamentally reevaluate today's solar market dynamics. We are approaching the bottom of the solar cost curve and the era of ever-declining solar module prices is largely behind us. In fact,in the near term,solar module prices will increase. Hence,we are focusing on leveraging our competitive position in our diversified and premium end markets to deliver growth in higher value-add applications of solar solutions,including system integration with battery storage. We will continue to solidify our market leadership through our strong brand and differentiated technology offerings to deliver attractive returns to our shareholders."

Ismael Guerrero,Corporate VP and President of Canadian Solar's Global Energy business,"I'm proud of our team's work and dedication during the pandemic,as we focused on delivering projects and working with our partners despite many challenges. In 2020,we achieved 1.4 GWp in project sales,while concurrently increasing our solar pipeline by over 4 GWp to more than 20 GWp. We are also making significant inroads in developing utility scale battery storage projects. These will contribute to grid stability in the markets where we operate by improving the grid's ability to absorb more renewable energy. In one year,we have tripled our storage pipeline from less than 3 GWh this time last year,to nearly 9 GWh,of which almost 1 GWh is already under construction. Furthermore,we recently announced the launch of the Japan Green Infrastructure Fund and the capital raise of the Canadian Solar Infrastructure Fund. We will continue to accelerate growth and optimize the monetization of our clean energy projects."

Dr. Huifeng Chang,Senior VP and CFO,added,"In the fourth quarter,we achieved over $1 billion in revenue and a 13.6% gross margin,both ahead of our guidance. We generated$120 million in net cash from operating activities in the fourth quarter and ended with a $1.6 billion total cash position,giving us the financial strength to support attractive long term growth opportunities. Meanwhile,we will continue to maintain capital discipline as we monitor and adjust our growth strategy based on market developments."

Fourth Quarter 2020 Results

Total module shipments in the fourthquarter of 2020 were 2,998 MW,an increase of 22% year-over-year ("yoy") and decrease of 5% quarter-over-quarter ("qoq"). Of the total,359MWwas shippedto the Company's own utility-scale solar power projects.

Net revenue in the fourth quarter of 2020 grew by 9% yoy and 14% qoq to $1,041million.The sequential increasewas driven by higher project salesspanning the United States,Mexico,Japan,Canada and Italy,and a slightly higher module average selling price ("ASP"),which was partly offset by lower module shipments.

Gross profit in the fourth quarter of 2020 was $141 million,down 21% qoq.Gross margin in the fourth quarter of 2020 was 13.6%,compared to guidance of 8% to 10%,and 19.5% in the thirdquarter of 2020.The gross margin decline was mainly driven by the previously anticipated increase in manufacturing costs,which was partly offset by higher module ASP and a more favorable mix.

Total operating expenses in the fourth quarter of 2020 were $139million compared to$119 million in the thirdquarter of 2020.Thesequentialincrease was primarily driven by higher shipping expenses and an impairment charge related to certain manufacturing assets.

Non-cash depreciation and amortization charges in the fourth quarter of 2020 were $59million,compared to $56million in the thirdquarter of 2020,and $45 million in the fourthquarter of 2019.

Net foreign exchange gainin the fourth quarter of 2020 was $4 million,compared to a net loss of $13 million in the thirdquarter of 2020 and a net loss of $3 million in the fourthquarter of 2019.

Income tax benefit in the fourth quarter of 2020 was $2 million,compared to $21 million of income tax expense in the thirdquarter of 2020 and $25 million of income tax expense in the fourthquarter of 2019.The benefit was driven by higher expected utilization of tax losses carried forward due to expansion in manufacturing capacity and improvement in process efficiency at the Company's factories.

Net income attributable to Canadian Solar in the fourthquarter of 2020 was $7million,or $0.11per diluted share,compared to net income of $9 million,or $0.15 per diluted share in the thirdquarter of 2020.

Net cash provided by operating activities in the fourthquarter of 2020 was $120million,compared to $47 million provided by operating activitiesin the thirdquarter of 2020.

New Corporate Structure

In July 2020,the Company announced its plan to carve-out and publicly list its Module and System Solutions ("MSS") subsidiary,CSI Solar Co.,in China. In preparation for the listing,the Company successfully completed the restructuring of its business segments during the fourth quarter of 2020. The table below is a summary comparison of the adjustments made in reporting structures. The main change being the transfer and inclusion of the China Energy business within the scope of CSI Solar.

As of December 31,2020,Canadian Solar owned 80% of CSI Solar,with the remaining 20% owned by strategic investors who purchased CSI Solar shares during the pre-IPO transaction. An additional 5% of CSI Solar shares were purchased by CSI Solar's employee stock ownership plan ("ESOP"),for which the vesting condition is the successful completion of the IPO. Both the CSI Solar and Global Energy segments are fully consolidated within Canadian Solar.

Historical reporting structure

New reporting structure

Module and System Solutions ("MSS") Business

Solar modules

Solar system kits

Other materials,components and services

(including EPC)

CSI Solar (entity to be listed in China)

Solar modules

Solar system kits

Battery energy storage solutions – new

China Energy (solar power projects,EPC

services and electricity revenue) – formerly

within the Energy Business

Other materials,components and services (including EPC)

Energy Business

Solar power projects – includes China Energy

Operations and maintenance (O&M)

Electricity revenue – includes China Energy

Other development services

Global Energy

Solar and energy storage power projects –

global excludes China

O&M and asset management services

Other development services – includes

electricity revenue for global,excludes China

Battery Storage Opportunities

The Company will start reporting revenues from its energy storage business in this quarter. Canadian Solar is one of the first movers in developing and supplying energy storage solutions and projects. Given the exponential market opportunities driven by rapid technology improvements,declining battery storage costs,rising penetration of renewable energy and accelerating retirements of fossil fuel capacity,the Company has strategically positioned itself in the battery storage market,both in solar plus battery storage as well as in stand-alone storage opportunities.

Canadian Solar has a unique advantage in tapping into the large energy storage market opportunities given its position as a global leader both in module manufacturing as well as a solar project development. Thus,both the CSI Solar and Global Energy segments have focused strategically on their respective energy storage businesses:

Under CSI Solar,the battery storage solutions team focuses on delivering bankable,end-to-end,integrated battery storage solutions for utility scale,commercial and industrial,as well as residential applications. These systems solutions will be complemented with long term service agreements,including future battery capacity augmentation services.

Under Global Energy,energy storage project development is now fully integrated within the main solar development teams. Given the segment's large and growing pipeline,it is uniquely positioned to capture utility-scale energy storage projects,both co-located with solar PV as well as stand-alone opportunities.

CSI Solar Segment

The table below sets forth Canadian Solar's 2021 capacity expansion targets along the solar module value chain. All new capacity will produce Canadian Solar's next generation high-power,high-efficiency modules in the HiKu and BiHiKu product portfolios.

Manufacturing Capacity,GW (period-end)

FY20 Actual

1H21

FY21

Ingot

2.1

5.1

10.0

Wafer

6.3

11.3

11.3

Cell

9.6

13.4

18.2

Module

16.1

23.2

25.7

Note: The Company's capacity expansion plans are subject to change without notice based on market conditions and capital allocation plans.

Operating Results

The following table presents unaudited select results of operations data of the Company's CSI Solar segment for the periods indicated.

CSI Solar Segment Financial Results*

(In Thousands of U.S. Dollars,Except Percentages and Unless Otherwise Stated)

Three Months Ended

Twelve Months Ended

December

31,2020

September

30,2020

December

31,2019

December

31,2019

Net revenues

784,588

921,529

772,140

3,105,044

2,591,154

Cost of revenues

678,410

738,352

574,687

2,496,153

1,977,502

Gross profit

106,178

183,177

197,453

608,891

613,652

Operating expenses

103,378

94,936

90,742

355,786

346,010

Income from operations

2,800

88,241

106,711

253,105

267,642

Gross margin

13.5%

19.9%

25.6%

19.6%

23.7%

Operating margin

0.4%

9.6%

13.8%

8.2%

10.3%

*Includes effects of both sales to third party customers and to the Company's Global Energy Segment.Please refer to the attached financial tables for intercompany transaction elimination information. Income from operations reflects management's allocation and estimate as some services are shared by the Company's two business segments. Historical values have been revised to conform to current period presentation.

The table below provides the geographic distribution of the net revenue of CSI Solar:

CSI Solar Net Revenues Geographic Distribution* (In Millions of U.S. Dollars,Except

Percentages)

Q4 2020

% of Net Revenues

Full year

2020

% of Net Revenues

Asia

414

62

1,295

47

Americas

149

22

860

31

Europe and others

105

16

595

22

Total

668

100

2,750

100

*Excludes sales from CSI Solar to Global Energy.

Canadian Solar shipped 3 GW of modules to more than 70countries in the fourthquarter of 2020.The top five markets ranked by shipments were the Vietnam,China,the U.S.,Brazil and Australia. For the full year of 2020,the top five markets ranked by shipments were the U.S.,Vietnam,Brazil and Japan.

Battery Storage Solutions

The Company is one of the early movers in developing system solutions and energy storage integration services. Within CSI Solar,the battery storage solutions team delivers competitive turnkey,integrated battery storage solutions,including bankable and fully wrapped capacity and performance guarantees. These guarantees are complemented with long term operations and maintenance agreements,which include future battery capacity augmentation services and bring in longer term stable income.

The table below sets forth CSI Solar's battery storage system integration's contracted projects and/or under construction,those in high probability forecast,and pipeline as of January 31,2021.

Contracted/

In Construction

Forecast

Pipeline

Total

Storage (MWh)

861

1,400

3,646

5,907

Contracted/in construction projects are expected to be delivered within the next 12 to 18 months. Forecast projects include those that have more than 75% probability of being contracted within the next 12 months,and the remaining pipeline includes projects that have been identified but have a below 75% probability of being contracted.

Global Energy Segment

Global Energy Business Strategy

Canadian Solar has one of the world's largest and most geographically diversified utility-scale solar project development platforms,with a strong track record originating,developing,financing,building over 5.7 GWp of solar power plants across six continents. As a first mover,the Company has built a leadership position in solar project development and currently has an aggregate pipeline of 20.2 GWp.

The Company's Global Energy business has been optimizing its operating model from developing and/or building projects,and selling them (either at notice to proceed,NTP,or commercial operation date,COD),to increasingly retaining minority ownership interest in its own projects. This allows Canadian Solar to:

Capture additional operational value throughout the partial ownership period,including long-term cash flows from power sales,operations and maintenance ("O&M"),asset management and other services;

Build and grow a stable base of long-term cash flows,which will help smooth the typical lumpiness associated with the development and sale of solar power projects;

Recycle a large portion of the capital into developing new solar projects for growth; and

Create new growth opportunities such as retrofitting energy storage systems onto or co-located with existing projects.

Management targets to achieve the following over the next 5 years:

Global Energy Targets

2020

Actual

2021

2022

2023

2024

2025

Annual Project Sales,GWp

1.4

1.8-2.3

2.4-2.9

3.2-3.7

3.6-4.1

4.0-4.5

Cumulative Projects Retained,MWp

118

~200

~400

~760

~960

~1,000

Operational O&M projects,GWp

2.2

~2.6

~4.0

~6.5

~9.2

~11.0

Note: Forecasts for annual project sales include both projects sold at NTP and COD,which have a significant impact on revenue but more limited

impact on profits. Final timing and recognition of project sales may be impacted by various external factors. Cumulative projects retained include

only the net size of the projects owned by Canadian Solar. These targets are subject to change without notice.

To help fund this strategy,the Company has developed and will continue to develop capital partnerships with investors seeking long-term,stable cash flows through investments in clean,profitable and countercyclical solar energy infrastructure investments. These capital partnerships include both public and private investment vehicles in select markets.

For example,in February 2021,the Company launched the Japan Green Infrastructure Fund,a new solar development platform in partnership with Macquarie Advisory & Capital Solutions. This was followed by Canadian Solar's participation in Canadian Solar Infrastructure Fund's ("CSIF",TSE: 9284) international offering,in which the Company maintained its ownership stake at approximately 15%,as CSIF expanded its capital base to acquire a 61 MWp portfolio of operating solar projects in Japan developed by Canadian Solar.

The Company intends to pursue similar capital partnerships to accelerate growth and deliver attractive returns to its shareholders. The next launch is expected in Brazil,in the form of a Brazilian Participation Fund for Infrastructure projects ("FIP-IE"). This fund has already been established and is currently planned for assets that will be built in 2021 to 2023. The Company is also in the process of establishing and launching similar project investment vehicles in certain European countries. Through these capital partnerships,the Company expects to optimize the monetization of project assets and build sustainable long-term value for Canadian Solar's shareholders.

Total Solar Project Pipeline

As January 31,2021,the Company's total project pipeline was 20.2 GWp,including,1.6 GWp under construction,3.8 GWp of backlog,and 14.8 GWp of earlier stage pipeline. The backlog includes projects that have passed their Risk Cliff Date and are expected to be built in the next one to four years. A project's Risk Cliff Date depends on the country where the project is located and is defined as the date on which the project passes the last high-risk development stage. This is usually after the projects have received all the required environmental and regulatory approvals,interconnection agreements,feed-in tariff ("FIT") arrangements and power purchase agreements ("PPAs"). Over 90% of projects in backlog are contracted (i.e.,have secured a PPA or FIT),and the remaining are reasonably assured of securing PPAs.

The Company's pipeline includes early- to mid-stage project opportunities currently under development but that are yet to be de-risked.

The following table presents the Company's full pipeline as of January 31,2021.

Total Project Pipeline (as of January 31,2021) – MWp

Region

In Construction

Backlog

Pipeline

Total

North America

328

728

5,030

6,086

Latin America

731*

2,229*

3,495

6,455

Europe,the Middle East and Africa ("EMEA")

-

429*

2,912

3,341

Japan

159

121

24

304

Asia Pacific excluding Japan and China

345

191

1,810

2,346

China (part of CSI Solar)

-

125

1,500

1,625

Total

1,563

3,823

14,771

20,157

Note: Gross MWp size of projects includes 510 MWp and 63MWp of projects in construction and backlog,respectively,in Latin America,

and 129 MWp in backlog in EMEA,that are not owned by Canadian Solar or have been sold to third parties.

The Company has a sizable amount of premium,high FIT projects in Japan. The table below sets forth the expected COD schedule of the Company's project backlog in development and construction in Japan,as of January 31,2021:

Expected COD Schedule – MWp

2021

2022

2023 and

Thereafter

Total

63

167

50

280

Solar Power Plants in Operation

As of January31,the Company's power plants in operation totaled 493 MWp,with a combined estimated net resale value of approximately $620million to Canadian Solar. The estimated resale value is based on selling prices that Canadian Solar is currently negotiating or transaction prices of similar assets in the relevant markets.

Latin America

Japan

Asia Pacific

ex. Japan & China

China

Total

100

75

61

257

493

Note: Gross MWp size of projects,includes 26MWp in Asia Pacific ex. Japan already sold to third parties. Also includes 61 MWp of projects in Japan which were sold in March 2021. China portfolio is part of CSI Solar.

Total Battery Storage Project Pipeline

The Global Energy segment has been actively developing utility-scale solar plus energy storage projects,as well as stand-alone battery storage projects. Over the past year,Canadian Solar has signed several new storage tolling agreements with a variety of power purchasers,including community choice aggregators,investor-owned utilities,universities,and public utility districts. The Company has also signed development services agreements to retrofit operational solar projects with battery storage,many of which were previously developed by the Company. Canadian Solar is uniquely positioned to deliver energy storage solutions to its customers,especially in solar plus storage solutions,given its proprietary integrated technologies and expertise in battery storage system integration and its unique positioning as both a top-tier module manufacturer and global project developer.

The table below sets forth Global Energy's storage project development backlog and pipeline as of January 31,2021.

In Operation

In Construction

Backlog

Pipeline

Total

Storage (MWh)

3

913

1,388

6,467

8,771

Operating Results

The following table presents unaudited select results of operations data of the Company's Global Energy segment for the periods indicated.

Global Energy Segment Financial Results*

(In Thousands of U.S. Dollars,Except Percentages and Unless Otherwise Stated)

Three Months Ended

Twelve Months Ended

December

31,2020

September

30,2020

December

31,2019

December

31,2019

Net revenues

372,617

78,566

215,854

726,167

718,735

Cost of revenues

340,403

53,635

178,583

577,052

604,856

Gross profit

32,214

24,931

37,271

149,115

113,879

Operating expenses

30,434

19,490

21,871

95,701

95,084

Income from operations

1,780

5,441

15,400

53,414

18,795

Gross margin

8.6%

31.7%

17.3%

20.5%

15.8%

Operating margin

0.5%

6.9%

7.1%

7.4%

2.6%

*Historical values have been revised to conform to current period presentation

Business Outlook

The Company's business outlook is based on management's current views and estimates given factors such as existing market conditions,order book,production capacity,input material prices,foreign exchange fluctuations,anticipated timing of project sales,and the global economic environment. This outlook is subject to uncertainty with respect to,among other things,customer demand,project construction and sale schedules,product sales prices and costs,and the global impact of the ongoing COVID-19 pandemic. Management's views and estimates are subject to change without notice.

For the firstquarter of 2021,the Company expects total module shipments to be in the range of 3.0 GW to 3.2 GW,including approximately 300 MW of module shipments to the Company's own projects. Total revenues are expected to be in the range of $1.0 billion to $1.1 billion. Gross margin is expected to be between 16% and 18%.

The Company reiterates full year 2021totalshipment guidance of 18 GW to 20 GWand project sales guidance of 1.8 GW to 2.3 GW,and provides total revenue guidance for 2021,expected to be in the range of $5.6 billion to $6.0 billion.

Dr. Shawn Qu,Chairman and CEO,commented,"We entered 2021 from a strong financial position and have significant growth catalysts unique to Canadian Solar such as our already large and expanding backlog of battery storage projects. Our Q1 profitability guidance also reflects the sale of high gross margin projects,particularly in Japan,which we have already announced. We balance our optimism with expected near-term volatility,driven by continued cost pressures and unfavorable foreign exchange rates.

"We are seeing strong demand and expect an acceleration through the year. We also continue to implement further price increases to reflect the high cost pressures. Medium to longer term,we remain very positive. We have a strong brand and increasing demand for quality clean energy projects. Our storage projects will also contribute to both topline and earnings this year as we complete key delivery milestones and build long-term sustainable returns for shareholders."

Recent Developments

On March 16,Canadian Solar announced a strategic partnership with German off-grid solar pioneer SolarWorX. Alongside EIT InnoEnergy and Deutsche Entwicklungsgesellschaft (DEG).

On March 8,Canadian Solar announced that it had completed the sale of two operational projects totaling 61 MWp to Canadian Solar Infrastructure Fund (CSIF) for approximately $283 million. Canadian Solar also participated in CSIF's equity offering and continues to own approximately 15% of CSIF.

On February 16,Canadian Solar announced that it successfully closed the Japan Green Infrastructure Fund in partner with Macquarie Advisory & Capital Solutions and raised a total of JPY22 billion committed capital to develop new projects in Japan.

On January 13,Canadian Solar announced its wholly-owned subsidiary Recurrent Energy completed the sale of the Slate project to Goldman Sachs Renewable Power LLC. The Slate project is a 300 MWac solar plus 140.25 MW / 561 MWh storage project located in California.

On January 7,Canadian Solar announced its wholly-owned subsidiary,Recurrent Energy completed the sale of the 144 MWac Pflugerville Solar project in Texas toDuke Energy Renewables,a subsidiary ofDuke Energy.

On January 5,Canadian Solar announced it sold an ownership interest in its Hays and Jenner solar power projects totaling 62 MWp to BluEarth Renewables.

On December 22,Canadian Solar announced it completed the sale of the remaining 30% ownership of the Big Fish SPV S.r.l. and Iron SPV S.r.l. solar power projects to Falck Renewables. Both projects have a total expected capacity of more than 290 MWp.

On December 16,Canadian Solar announced it completed the sale of the 19 MWp Gunma Aramaki solar power plant in Japan for approximately $64 million.

On November 23,Canadian Solar announced it signed a 12-year power purchase agreement for a 170 MWp cluster of projects with BTG Pactual and was awarded with two projects totaling 692 MWp with a 15-year purchase agreement in a private auction by Furnas Centrais Elétricas.

Conference Call Information

The Company will hold a conference call at 8:00 a.m. U.S. Eastern Daylight Time on Thursday,2021 (8:00 p.m.,Thursday,2021 in Hong Kong) to discuss its fourthquarter and full year 2020results and business outlook. The dial-in phone number for the live audio call is +1-866-519-4004 (toll-free from the U.S.),+852-3018-6771 (local dial-in from Hong Kong) or +1 845-675-0437 from international locations. The passcode for the call is 5243226. A live webcast of the conference call will also be available on the investor relations section of Canadian Solar's website at www.canadiansolar.com.

A replay of the call will be available 2 hours after the conclusion of the call until 9:00 a.m. U.S. Eastern Daylight Time on Friday,March 26,2021 (9:00 p.m.,2021 in Hong Kong) and can be accessed by dialing +1-855-452-5696 (toll-free from the U.S.),+852-3051-2780 (local dial-in from Hong Kong) or +1-646-254-3697 from international locations. The passcode for the replay is 5243226. A webcast replay will also be available on the investor relations section of Canadian Solar's at www.canadiansolar.com.

AboutCanadian Solar Inc.

Canadian Solar was founded in 2001 in Canada and is one of the world's largest solar technology and renewable energy companies. It is a leading manufacturer of solar photovoltaic modules,provider of solar energy and battery storage solutions,and developer of utility-scale solar power and battery storage projects with a geographically diversified pipeline in various stages of development. Over the past 19 years,Canadian Solar has successfully delivered over 52 GW of premium-quality,solar photovoltaic modules to customers in over 150 countries. Likewise,since entering the project development business in 2010,Canadian Solar has developed,built and connected over 5.7 GWp in over 20 countries across the world. Currently,the Company has around 500 MWp of projects in operation,over 5 GWp of projects under construction or in backlog (late-stage),and an additional 15 GWp of projects in pipeline (mid- to early- stage). Canadian Solar is one of the most bankable companies in the solar and renewable energy industry,having been publicly listed on the NASDAQ since 2006.For additional information about the Company,follow Canadian Solar onLinkedInor visitwww.canadiansolar.com.

Safe Harbor/Forward-Looking Statements

Certain statements in this press release regarding the Company's expected future shipment volumes,gross margins are forward-looking statements that involve a number of risks and uncertainties that could cause actual results to differ materially. These statements are made under the "Safe Harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. In some cases,you can identify forward-looking statements by such terms as "believes," "expects," "anticipates," "intends," "estimates," the negative of these terms,or other comparable terminology. Factors that could cause actual results to differ include general business and economic conditions and the state of the solar industry; volatility,uncertainty,delays and disruptions related to the COVID-19 pandemic; governmental support for the deployment of solar power; future available supplies of high-purity silicon; demand for end-use products by consumers and inventory levels of such products in the supply chain; changes in demand from significant customers; changes in demand from major markets such as Japan,India,China and Brazil; changes in customer order patterns; changes in product mix; capacity utilization; level of competition; pricing pressure and declines in average selling prices; delays in new product introduction; delays in utility-scale project approval process; delays in utility-scale project construction; delays in the completion of project sales; continued success in technological innovations and delivery of products with the features customers demand; shortage in supply of materials or capacity requirements; availability of financing; exchange rate fluctuations; litigation and other risks as described in the Company's SEC filings,including its annual report on Form 20-F filed on April 28,2020. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable,it cannot guarantee future results,level of activity,performance,or achievements. Investors should not place undue reliance on these forward-looking statements. All information provided in this press release is as of today's date,unless otherwise stated,and Canadian Solar undertakes no duty to update such information,except as required under applicable law.

FINANCIAL TABLES FOLLOW

The following tables provide unaudited select financial data for the Company's CSI Solar and Global Energy businesses for 2020 and 2019. Historical values of 2019 have been revised to conform to current period presentation:

Select Financial Data – CSI Solar and Global Energy

Three Months Ended December 31,2020

(In Thousands of U.S. Dollars,Except Percentages)

CSI Solar

Global

Energy

Elimination

and

unallocated

items(1)

Total

Net revenues

784,588

372,617

(116,551)

1,040,654

Cost of revenues

678,410

340,403

(119,247)

899,566

Gross profit

106,178

32,214

2,696

141,088

Gross margin

13.5%

8.6%

—

13.6%

Income from operations

2,800

1,780

(2,101)

2,479

Select Financial Data - CSI Solar and Global Energy

TwelveMonthsEndedDecember31,Except Percentages)

CSI Solar

Global

Energy

Elimination

and

unallocated

items(1)

Total

Net revenues

3,044

726,167

(354,716)

3,476,495

Cost of revenues

2,153

577,052

(286,624)

2,786,581

Gross profit

608,891

149,115

(68,092)

689,914

Gross margin

19.6%

20.5%

—

19.8%

Income from operations

253,105

53,414

(86,089)

220,430

Select Financial Data - CSI Solar and Global Energy

ThreeMonthsEndedDecember31,2019

(In Thousands of U.S. Dollars,Except Percentages)

CSI Solar

Global

Energy

Elimination

and

unallocated

items(1)

Total

Net revenues

772,140

215,854

(68,287)

919,707

Cost of revenues

574,687

178,583

(63,065)

690,205

Gross profit

197,453

37,271

(5,222)

229,502

Gross margin

25.6%

17.3%

—

25.0%

Income from operations

106,711

15,400

(10,685)

111,426

Select Financial Data - CSI Solar and Global Energy

TwelveMonthsEndedDecember31,Except Percentages)

CSI Solar

Global

Energy

Elimination

and

unallocated

items(1)

Total

Net revenues

2,154

718,735

(109,306)

3,200,583

Cost of revenues

1,502

604,856

(100,272)

2,482,086

Gross profit

613,652

113,879

(9,034)

718,497

Gross margin

23.7%

15.8%

—

22.4%

Income from operations

267,642

18,795

(27,558)

258,879

(1) Includes inter-segment elimination,and unallocated corporate costs not considered part of management's evaluation of reportable segment operating performance.

Select Financial Data - CSI Solar,and Global Energy

Three Months Ended

December 31,2020

TwelveMonthsEnded

December31,2020

(In Thousands of U.S. Dollars)

CSI SolarRevenues:

Solar modules

586,820

2,348,724

Solar system kits

39,071

157,656

Battery storage solutions

4,953

7,899

China energy (incl. electricity sales)

15,194

175,388

Others

21,999

60,661

Subtotal

668,037

2,750,328

Global Energy Revenues:

Solar power projects

354,671

654,827

O&M and asset management services

8,365

26,386

Others

9,581

44,954

Subtotal

372,617

726,167

Total net revenues

1,654

3,495

Select Financial Data - CSI Solar,2019

TwelveMonthsEnded

December31,2019

(In Thousands of U.S. Dollars)

CSI SolarRevenues:

Solar modules

604,333

2,012,059

Solar system kits

31,430

116,449

Battery storage solutions

—

—

China energy (incl. electricity sales)

17,551

58,096

Others

50,539

295,244

Subtotal

703,853

2,481,848

Global Energy Revenues:

Solar power projects

193,970

652,050

O&M and asset management services

6,390

19,750

Others

15,494

46,935

Subtotal

215,854

718,735

Total net revenues

919,707

3,583

Canadian Solar Inc.

Unaudited Condensed Consolidated Statements of Operations

(In Thousands of U.S. Dollars,Except Share and Per Share Data and Unless Otherwise Stated)

Three Months Ended

Twelve Months Ended

December 31,

September

30,

December

31,

December 31,

2020

2020

2019

2020

2019

Net revenues

$ 1,654

$ 914,360

$ 919,707

$ 3,495

$ 3,583

Cost of revenues

899,566

735,943

690,205

2,581

2,086

Gross profit

141,088

178,417

229,502

689,914

718,497

Operating expenses:

Selling and distribution

expenses

64,123

53,998

50,099

224,243

180,326

General and administrative

expenses

70,099

56,183

64,133

225,597

242,783

Research and development

expenses

10,040

14,147

10,179

45,167

47,045

Other operating income

(5,653)

(4,958)

(6,335)

(25,523)

(10,536)

Total operating expenses

138,609

119,370

118,076

469,484

459,618

Income from operations

2,479

59,047

111,426

220,430

258,879

Other income (expenses):

Interest expense

(17,984)

(17,917)

(19,734)

(71,874)

(81,326)

Interest income

2,415

2,031

2,979

9,306

12,039

Gain (loss) on change in

fair value of derivatives,net

6,098

13,143

(6,294)

50,001

(22,218)

Foreign exchange gain

(loss),net

(1,992)

(26,517)

3,717

(64,820)

10,370

Investment income (loss)

10,321

(6,393)

120

(8,559)

1,929

Other expenses,net

(1,142)

(35,653)

(19,212)

(85,946)

(79,206)

Income before income taxes

and equity in earnings of

unconsolidated investees

1,337

23,394

92,214

134,484

179,673

Income tax benefit (expense)

2,463

(20,632)

(25,209)

1,983

(42,066)

Equity in earnings of

unconsolidated investees

2,919

6,105

923

10,779

28,948

Net income

6,719

8,867

67,928

147,246

166,555

Less: Net income (loss)

attributable to non-controlling

interests

84

34

191

543

(5,030)

Net income attributable to

Canadian Solar Inc.

$ 6,635

$ 8,833

$ 67,737

$ 146,703

$ 171,585

Earnings per share - basic

$ 0.11

$ 0.15

$ 1.13

$ 2.46

$ 2.88

Shares used in computation -

basic

59,801,709

59,749,307

59,846,779

59,575,898

59,633,855

Earnings per share - diluted

$ 0.11

$ 0.15

$ 1.12

$ 2.38

$ 2.83

Shares used in computation -

diluted

61,147,256

60,829,073

60,407,086

62,306,819

60,777,696

Canadian Solar Inc.

Unaudited Condensed Consolidated Statement of Comprehensive Income

(In Thousands of U.S. Dollars)

Three Months Ended

TwelveMonths Ended

December 31,

September30,

2020

2020

2019

2020

2019

Net Income

6,555

Other comprehensive income

(net of tax of nil):

Foreign currency translation

adjustment

58,943

32,173

8,923

76,142

319

De-recognition of commodity

hedge and interest rate swap

—

6,285

—

10,724

—

Gain (loss) on changes in fair

value of derivatives

(256)

256

1,147

(4,115)

(5,847)

Comprehensive income

65,406

47,581

77,998

229,997

161,027

Less: comprehensive

income(loss) attributable to non-

controlling interests

84

51

(2,216)

2,496

(11,100)

Comprehensive income

attributable to Canadian Solar

Inc.

65,322

47,530

80,214

227,501

172,127

Canadian Solar Inc.

Unaudited Condensed Consolidated Balance Sheets

(In Thousands of U.S.Dollars)

December 31,

December31,

2020

2019

ASSETS

Current assets:

Cash and cash equivalents

$ 1,178,752

$ 668,770

Restricted cash

458,334

526,723

Accounts receivable trade,net

408,958

436,815

Accounts receivable,unbilled

28,461

15,256

Amounts due from related parties

5,834

31,232

Inventories

695,981

554,070

Value added tax recoverable

102,460

108,920

Advances to suppliers

182,146

47,978

Derivative assets

23,351

5,547

Project assets

747,764

604,083

Prepaid expenses and other current assets

353,781

253,542

Total current assets

4,185,822

3,252,936

Restricted cash

2,629

9,927

Property,plant and equipment,net

1,157,731

1,046,035

Solar power systems,net

158,262

52,957

Deferred tax assets,net

170,656

153,963

Advances to suppliers

97,173

40,897

Prepaid land use right

62,414

60,836

Investments in affiliates

78,291

152,828

Intangible assets,net

22,429

22,791

Project assets

389,702

483,051

Right-of-use assets

26,793

37,733

Other non-current assets

184,952

153,253

TOTAL ASSETS

$ 6,536,854

$ 5,467,207

Canadian Solar Inc.

Unaudited Condensed Consolidated Balance Sheets (Continued)

(In Thousands of U.S.Dollars)

December 31,

2020

2019

Current liabilities:

Short-term borrowings

$ 1,202,285

$ 933,120

Long-term borrowings on project assets -

current

198,794

286,173

Accounts payable

514,742

585,601

Notes payable

710,636

544,991

Amounts due to related parties

314

10,077

Other payables

508,839

446,454

Advance from customers

189,470

134,806

Derivative liabilities

10,755

10,481

Operating lease liabilities

15,204

18,767

Other current liabilities

237,316

121,527

Total current liabilities

3,588,355

3,091,997

Accrued warranty costs

37,732

55,878

Long-term borrowings

446,090

619,477

Convertible notes

223,214

—

Derivatives liabilities

—

1,841

Liability for uncertain tax positions

14,729

15,353

Deferred tax liabilities

49,080

56,463

Loss contingency accruals

26,458

28,513

Operating lease liabilities

13,232

20,718

Financing liabilities

81,871

76,575

Other non-current liabilities

163,308

75,334

TOTAL LIABILITIES

4,644,069

4,042,149

Equity:

Common shares

687,033

703,806

Treasury stock

—

(11,845)

Additional paid-in capital

(28,236)

17,179

Retained earnings

940,346

793,601

Accumulated other comprehensive loss

(28,721)

(109,607)

Total Canadian Solar Inc. shareholders' equity

1,570,422

1,393,134

Non-controlling interests in subsidiaries

322,363

31,924

TOTAL EQUITY

1,892,785

1,425,058

TOTAL LIABILITIES AND EQUITY

$ 6,854

$ 5,207

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