Canadian Solar Reports Second Quarter 2021 Results

GUELPH,ON,Aug. 12,2021 -- Canadian Solar Inc.("Canadian Solar" or the "Company") (NASDAQ: CSIQ) today announced financial results for the quarter ended June 30,2021.

Highlights

Solar module shipments of 3.7 GW in the second quarter of 2021,top end of 3.5 GW to 3.7 GW guidance.

Revenue increased 105% year-over-year ("yoy") to a record $1.43 billion,in line with guidance of $1.4 billion to $1.5 billion.

Gross margin of 12.9%,ahead of guidance range of 9.5% to 10.5%.

Net income attributable to Canadian Solar of $11 million,or $0.18 per diluted share.

1.5 GWh of battery storage projects under construction and 19 GWh of total storage development pipeline.

Published the ESG Sustainability Report with updated disclosures aligned with global standards on July 29,2021.

Carve-out IPO of CSI Solar subsidiary remains on track.

Dr. Shawn Qu,Chairman and CEO,commented,"I am pleased that we have turned the corner in the second quarter,delivering strong revenue growth and better-than-expected profitability. While market conditions remain challenging,we continue to focus on initiatives to strengthen our long-term positioning such as growing our pipeline of valuable solar and battery storage projects,and differentiating our technology and product offering through value-add system solutions. Notably,we have made significant progress in growing,executing and monetizing our battery storage projects and will update the market in due course.

"At the same time,we are also fully incorporating environmental,social and governance factors in all our major business decisions,and recently published our latest ESG Sustainability Report. As an example,we are establishing our first manufacturing facility of 10 GW ingot capacity in Qinghai Province,which will help us meaningfully reduce the carbon footprint of our products as nearly 90% of Qinghai's installed power capacity is clean energy.

"Separately,the carve-out IPO of CSI Solar remains on track,with the listing application materials having been submitted. We are now addressing comments from the Shanghai Stock Exchange in accordance with usual review procedures."

Yan Zhuang,President of Canadian Solar's CSI Solar subsidiary,said,"Although polysilicon and transportation costs remained elevated,we continue to raise module pricing,prioritize margins while maximizing capacity utilization,and continue to improve on our product and manufacturing efficiency as we take further cost control measures. During the second quarter,we also delivered our first batch of large-scale battery storage shipments. While we anticipate and respond to short-term market fluctuations,our long-term growth strategy remains unchanged. That is,to grow market share through capacity expansion,improve pricing power through technology differentiation and optimized channel structure,and gain more control over our supply chain through upstream positioning."

Ismael Guerrero,Corporate VP and President of Canadian Solar's Global Energy subsidiary,"We have seen a meaningful increase in demand for our solar and battery storage projects driven by both existing and new low cost of capital market players. This demonstrates that the capital pool for clean energy infrastructure assets is both broadening and deepening,yet the supply of these assets remains scarce. We are positioned to benefit from these trends with a global solar project pipeline of 22 GW of which nearly 6 GW is contracted and/or under construction. We also have a global battery storage project pipeline of 19 GWh of which 2.3 GWh is contracted and/or under construction. Recently,we started signing higher priced PPAs (power purchase agreements),which are helping to offset the impact of higher equipment costs. Meanwhile,we continue to execute on our strategy to grow our base of recurring income through expanding our market share in services such as operations and maintenance and long-term ownership of project investment vehicles."

Dr. Huifeng Chang,Senior VP and CFO,added,"We posted our highest quarterly revenue of $1.43 billion in the second quarter and made significant progress to capitalize on growth in the battery storage market. We ended the second quarter with $1.3 billion in cash,and have raised approximately $110 million to date from our at-the-market equity offering program,which is well on track. We also took the opportunity to lengthen the overall maturity profile of our debt during the quarter to further improve our financial position."

Second Quarter 2021 Results

Total module shipments in the secondquarter of 2021 were 3.66 GW,a 26% yoy increase and 17% quarter-over-quarter ("qoq") increase. Of the total,167 MWwas shippedto the Company's own utility-scale solar power projects.

Net revenue in the second quarter of 2021 grew by 105% yoy and 31% qoq to $1,430 million.The sequential improvementwas driven by an increase in module shipments and average selling price ("ASP"),growth in beyond-module sales and a higher revenue contribution from battery storage shipments,partially offset by lower project sales.

Gross profit in the second quarter of 2021 was $185 million,down 5% qoq but up 26% yoy.Gross margin in the second quarter of 2021 was 12.9%,above guidance of 9.5% to 10.5% driven by higher module ASP,manufacturing efficiency improvements and a greater contribution from battery storage shipments and beyond-module sales. Sequentially,the second quarter gross margin was below first quarter 2021 gross margin of 17.9% mainly driven by lower project sales margin due to a geographic mix shift.

Total operating expenses in the second quarter of 2021 were $158 million compared to$151 million in the first quarter of 2021.Thesequentialincrease was mainly driven by higher shipping and handling expenses and a decrease in other operating income,partially offset by a customer claim reversal.

Non-cash depreciation and amortization charges in the second quarter of 2021 were $66million,compared to $62million in the firstquarter of 2021,and $48 million in the second quarter of 2020. The sequential increase was driven by CSI Solar's capacity expansion as reflected in higher property,plant and equipment.

Net foreign exchange loss in the second quarter of 2021 was $3 million,compared to a net loss of $7 million in the first quarter of 2021and a net loss of $5 million in the second quarter of 2020.

Income tax benefit in the second quarter of 2021 was $2 million,compared to $14 million of income tax expense in the first quarter of 2021and $9 million of income tax expense in the secondquarter of 2020.The benefit reflected lower effective tax rate and lower impact from high tax jurisdictions.

Net income attributable to Canadian Solar in the second quarter of 2021 was $11million,or $0.18per diluted share,compared to net income of $23 million,or $0.36 per diluted share in the first quarter of 2021.The decline in net income was driven by lower gross profit and higher operating expenses,partially offset by the income tax benefit.

Net cash used by operating activities in the secondquarter of 2021 was $61 million,compared to $83 million in the first quarter of 2021. The operating cash outflow was mainly driven by an increase in accounts receivable and a continued increase in inventory,as a result of capacity expansion as well as a tactical hedge against input cost and ASP inflation. This was partially offset by higher accounts and notes payables.

Total debt in the second quarter of 2021 was $2.23 billion,compared to $2.28 billion in the first quarter of 2021. The decrease in total debt was mainly driven by a reduction of project financing upon project sales,partially offset by new borrowing and existing facility drawdowns. Non-recourse debt used to finance solar power projects decreased to $454 million in the second quarter of 2021 from $522 million in the first quarter of 2021 as a result of project sales.

Battery Storage Opportunities

Canadian Solar is strategically positioned in the battery storage market,both in solar plus battery storage,as well as in stand-alone storage opportunities. The rapid growth of the energy storage market is driven by technology improvements,declining battery storage costs,rising penetration of renewable energy and accelerating retirements of fossil fuel capacity.

Canadian Solar has a strong brand recognition and global network given its leadership in both module manufacturing and solar project development. Both CSI Solar and Global Energy have focused strategically on their respective energy storage businesses:

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 positioned to capture utility-scale energy storage projects.

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.

While there are synergies between the Global Energy and CSI Solar teams,both operate independently and on different sections of the battery storage value chain. The project pipeline for each team should be assessed independently. Please refer to the Global Energy and CSI Solar sections of this document for specific pipeline figures.

Global Energy Segment

Canadian Solar has one of the world's largest and most geographically diversified utility-scale solar and energy storage project development platforms,with a strong track record of originating,developing,financing and building over 6.1 GWp of solar power plants across six continents. The Company has built a leadership position in solar project development with over 22 GWp total pipeline,as well as in energy storage project development with over 19 GWh of aggregate pipeline.

The continued pipeline expansion and strong project development track record will support Global Energy's growth in three key areas:

Project sales: The Company plans to grow its volume of project sales by a compound annual growth rate of 25% over the next five years,well ahead of global market growth rate of approximately 20% according to many research reports.

Investment vehicles: The Company is optimizing its project monetization strategy by establishing local investment vehicles that will help maximize the value of its project assets. The Company also intends to retain minority ownership in these vehicles. By 2025,the Company plans to reach at least 1 GW of combined net ownership in solar power projects through these vehicles. This approach will help the Company build and grow a stable base of long-term cash flows from contracted electricity. The Company will be able to recycle a large portion of the capital into developing new solar projects for growth. Meanwhile,Canadian Solar expects 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 (see point 3). The Company currently owns a 15% stake in the Canadian Solar Infrastructure Fund ("CSIF",TSE: 9284),the largest listed Japanese infrastructure fundon the Tokyo Stock Exchange. The Company also established the Brazilian Participation Fund for Infrastructure projects (FIP-IE). Similar project investment vehicles in certain European countries are also currently underway. Through launching these localized vehicles,Canadian Solar is building up its expertise in designing investment vehicles in local markets that will help maximize the value of its project assets.

Services: Canadian Solar currently manages over 2 GW of operational projects under long-term O&M agreements,and an additional 2 GW of contracted projects that will be operated and maintained by the Company once they are placed in operation. The Company's target is to reach 11 GW of projects under O&M agreements by 2025.

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

Global Energy Targets

2021

2022

2023

2024

2025

Annual Project Sales,GWp

1.8-2.3

2.4-2.9

3.2-3.7

3.6-4.1

4.0-4.5

Operational O&M Projects,GWp

2.6

4.0

6.5

9.2

11.0

Net Cumulative Projects Retained,MWp

200

400

760

960

1,000

Gross Cumulative Projects Retained,MWp

650

1,300

2,650

3,150

3,400

Solar Project Pipeline

As of June 30,2021,the Company's total project pipeline was 22.2 GWp,including 1.7 GWp under construction,4.1 GWp of backlog,and 16.4 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 total project pipeline.

Total Project Pipeline (as of June 30,2021) – MWp

Region

In Construction

Backlog

Pipeline

Total

North America

115

744

4,900

5,759

Latin America

981*

2,100

4,310

7,391

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

-

455*

3,632

4,087

Japan

145

236

72

453

Asia Pacific excluding Japan and China

347

191

1,547

2,085

China (part of CSI Solar)

80

403

1,920

2,403

Total

1,668

4,129

16,381

22,178

*Note: Gross MWp size of projects includes 573 MWp in construction in Latin America,

and 110 MWp in backlog in EMEA,that are not owned by Canadian Solar or have been sold to third parties.

The Company has 381 MWp 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 June 30,2021:

Expected COD Schedule – MWp

2021

2022

2023 and

thereafter

Total

31

190

160

381

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. TheCompany found that virtually all its solar power projects under development can co-host energy storage facilities and has done so since the first quarter of 2021. By co-hosting energy storage facilities with solar power plants on the same piece of land and using the same interconnection point,the Company expects to significantly enhance the value of its assets under development.

Canadian Solar has already signed several 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.

The table below sets forth Global Energy's storage project development backlog and pipeline.

StorageProject Development Backlog and Pipeline(as of June 30,2021) – MWh

Region

In Construction

Backlog

Pipeline

Total

North America

1,501

800

9,285

11,586

Latin America

-

-

4,505

4,505

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

-

-

1,242

1,242

Japan

-

-

19

19

Asia Pacific excluding Japan

-

-

1,910

1,910

Total

1,501

800

16,961

19,262

Solar Power Plants and Battery Storage Projects in Operation

As of June 30,the Company's solar power plants in operation totaled 391 MWp,with a combined estimated net resale value of approximately $390 million 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.

Solar Power Plants in Operation – MWp

Latin America

Japan

Asia Pacific

ex. Japan and China

China

Total

100

28

61

202

391

Note: Gross MWp size of projects,includes 26MWp in Asia Pacific ex. Japan and China already sold to

third parties. China portfolio is part of CSI Solar.

Operating Results

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

Global Energy Segment Financial Results

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

Three Months Ended

Six Months Ended

June 30,

2021

March 31,

2021

June 30,

2020*

June 30,

2020*

Net revenues

280,614

471,062

32,433

751,676

274,983

Cost of revenues

268,855

358,037

29,080

626,892

183,014

Gross profit

11,759

113,025

3,353

124,784

91,969

Operating expenses

15,632

27,944

17,991

43,576

45,777

Income (loss)from operations

(3,873)

85,081

(14,638)

81,208

46,192

Gross margin

4.2%

24.0%

10.3%

16.6%

33.4%

Operating margin

-1.4%

18.1%

-45.1%

10.8%

16.8%

*Historical amounts for the three months and six months ended June 30,2020 have been revised to conform to current period presentation

CSI Solar Segment

CSI Solar's 2021 and 2022 capacity expansion targets are detailed below.

Manufacturing Capacity,GW (as of period end)

FY20 Actual

1H21 Actual

FY21 Plan

Ingot

2.1

5.1

5.1

Wafer

6.3

8.7

11.5

Cell

9.6

13.3

13.9

Module

16.1

19.7

22.7

Note: CSI Solar'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 CSI Solar segment for the periods indicated.

CSI Solar Segment Financial Results*

(In Thousands of U.S. Dollars,

2021

March 31,

2021

June 30,

2020**

June 30,

2020**

Net revenues

1,183,958

695,152

709,180

1,879,110

1,398,927

Cost of revenues

1,028,470

627,694

551,812

1,656,164

1,079,390

Gross profit

155,488

67,458

157,368

222,946

319,537

Operating expenses

140,516

120,126

79,484

260,642

157,472

Income (loss) from operations

14,972

(52,668)

77,884

(37,696)

162,065

Gross margin

13.1%

9.7%

22.2%

11.9%

22.8%

Operating margin

1.3%

-7.6%

11.0%

-2.0%

11.6%

* 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 amounts for the three months and six months ended June 30,2020 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)

Q2 2021

% of Net

Revenues

Q1 2021

% of Net

Revenues

Q2 2020

% of Net

Revenues

Asia

527

46

240

39

265

40

Americas

421

37

261

42

211

32

Europe and others

201

17

117

19

187

28

Total

1,149

100

618

100

663

100

*Excludes sales from CSI Solar to Global Energy.

CSI Solar shipped 3.7 GW of modules to nearly 80countries in the secondquarter of 2021.The top five markets ranked by shipments were China,the U.S.,Brazil,Germany and Japan.

Battery Storage Solutions

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,2021.

Contracted/

In Construction

Forecast

Pipeline

Total

Storage (MWh)

861

1,400

4,351

6,612

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.

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 third quarter of 2021,the Company expects total module shipments to be in the range of 3.8 GW to 4.0 GW,including approximately 275 MW of module shipments to the Company's own projects. Total revenues are expected to be in the range of $1.2 billion to $1.4 billion. Gross margin is expected to be between 14% and 16%.

The Company reiterates its expectation that full year 2021 revenue will be in the range of $5.6 billion to $6.0 billion,while slightly reducing its full year2021 total module shipment guidance to 16 GW to 17 GWfrom 18 GW to 20 GW previously.The Company reiterates its project sales guidance of 1.8 GW to 2.3 GW and total battery storage shipment guidance of 810 MWh to 860 MWh for the full year 2021.

Dr. Shawn Qu,Chairman and CEO,commented,"While we continue to navigate volatile market conditions,we expect Canadian Solar's performance to improve through the remainder of 2021 both in shipment volume,profitability and project sale execution. The wider-than-usual revenue and profitability range for the third quarter reflects the timing of certain project sales which may be recognized towards the end of the quarter or early in the following one. Additionally,we expect higher module ASPs to offset the lowered full year module shipments and therefore full year revenue guidance is unchanged. Canadian Solar continues to expect market share gains in 2021 as the trimmed shipment guidance is reflective of marginally softer global demand expectations as a response to higher equipment costs.

"Structurally,demand for solar energy and battery storage continues to grow strongly. Canadian Solar is well positioned to capture long-term growth through continued investments in high quality capacity,project pipeline and technology R&D,and continues to focus on delivering long-term sustainable returns for shareholders."

Recent Developments

On August 10,Canadian Solar announced its wholly owned subsidiary Recurrent Energy signed a 15-year Resource Adequacy agreement with Pacific Gas & Electric to provide 150 MW / 600 MWh of energy storage in phase 2 of the Crimson project. The full Crimson project of 350 MW / 1,400 MWh will be one of the largest battery energy storage projects in the world when it comes online beginning in summer 2022.

On July 29,Canadian Solar published its 2020 Sustainability Report,which provides an extensive analysis of the Company's environmental,social and governance performance,and establishment of organizational structures and target metrics to incorporate ESG into every major business decision.

On July 27,Canadian Solar announced it closed a BRL500 million (approximately US$100 million) financing facility with Brazilian banks BTG Pactual and Itaú BBA to support the development and construction of its solar projects in Brazil. The facility will fund up to 70% of Canadian Solar's equity contribution in a subset of its Brazilian project portfolio,a unique structure in the local market.

On July 21,Canadian Solar announced its wholly owned subsidiary Recurrent Energy completed the sale of the Maplewood 1 and Maplewood 2 solar projects in Texas to a leading U.S. annuity and life insurance company. The two projects,with a combined capacity of 328 MWp,are currently under construction and are expected to reach commercial operation before the end of Q3 2021.

On July 14,Canadian Solar announced it signed a 10-year power purchase agreement with Centrica Energy Trading A/S for two solar power projects totaling 12 MWp inItaly.

On July 12,Canadian Solar announced it was awarded the first utility-scale battery storage project in Colombia of 45 MW / 45 MWh. The project will consist of a 45 MWh lithium-ion battery energy storage system and is expected to reach commercial operation byJune 2023. The project is granted with a 15-year revenue structure with the Colombian government and is indexed to the country's inflation or producer price index.

On June 29,Canadian Solar announced it was awarded 86 MWp in Japan's 8th solar energy auction,accounting for the largest share of the total capacity auctioned. The projects are expected to reach commercial operation between the years of 2024 and 2026. Once constructed,these projects will enter into a 20-year power purchase agreement with Tohoku Power Electric Companyat a weighted average rate of ¥10.77 ($0.098) per kWh.

On June 28,Canadian Solar announced its majority-owned subsidiary CSI Solar Co.,Ltd. ("CSI Solar") submitted the application documents for its potential initial public offering ("IPO") and listing on the Science and Technology Innovation Board (the "STAR" Market) of the Shanghai Stock Exchange. The documents have been received by the Shanghai Stock Exchange.

On June 24,Canadian Solar announced it secured EUR50 million bilateral corporate facility with Banco Santander,S.A. ("Santander") to support growth of its project development pipeline in the EMEA region,further diversifying the Company's sources of financing.

On June 22,Canadian Solar announced its wholly owned subsidiary Recurrent Energy expanded its energy storage footprint in the U.S.,with several leading Battery Energy Storage Systems ("BESS") contracted totaling 2.3 GWh to be built in 2021 and 2022. These projects span retrofits as-a-service,solar plus storage PPAs,and stand-alone storage tolling agreements.

On May 24,Canadian Solar announced it signed a 10-year power purchase agreement with Axpo Italia for the purchase of energy produced by two solar power plants totaling 12 MWp under development by Canadian Solar in Italy.

Conference Call Information

The Company will hold a conference call at 8:00 a.m. U.S. Eastern Daylight Time on Thursday,August 12,2021 (8:00 p.m.,Thursday,2021 in Hong Kong) to discuss its second quarter 2021 results 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),400-6208-038 (local dial-in from Mainland China) or +1 845-675-0437 from international locations. The passcode for the call is 9437597. 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,August 20,2021 (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),400-6322-162 (toll-free from Mainland China) or +1-646-254-3697 from international locations. The passcode for the replay is 9437597.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 20 years,Canadian Solar has successfully delivered over 59 GWof premium-quality,solar photovoltaic modules to customers across the world. Likewise,since entering the project development business in 2010,Canadian Solar has developed,built and connected over 6.1 GWp in over 20 countries across the world. Currently,the Company has around 400 MWp of projects in operation,nearly 6 GWp of projects under construction or in backlog (late-stage),and an additional 16 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,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 that 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 19,2021. 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. Historical amounts for the three months and six months ended June 30,2020 have been revised to conform to current period presentation:

Select Financial Data – CSI Solar and Global Energy

Three Months Ended June 30,2021

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

CSI Solar

Global

Energy

Elimination

and

unallocated

items (1)

Total

Net revenues

1,958

280,614

(34,911)

1,429,661

Cost of revenues

1,470

268,855

(52,451)

1,244,874

Gross profit

155,488

11,759

17,540

184,787

Gross margin

13.1%

4.2%

—

12.9%

Income (loss) from

operations

14,972

(3,873)

15,281

26,380

Select Financial Data – CSI Solar and Global Energy

Six Months Ended June 30,110

751,676

(111,786)

2,519,000

Cost of revenues

1,164

626,892

(143,445)

2,139,611

Gross profit

222,946

124,784

31,659

379,389

Gross margin

11.9%

16.6%

—

15.1%

Income (loss) from

operations

(37,696)

81,208

26,351

69,863

Select Financial Data - CSI Solar and Global Energy

ThreeMonthsEndedJune 30,2020

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

CSI Solar

Global

Energy

Elimination

and

unallocated

items(1)

Total

Net revenues

709,180

32,433

(45,767)

695,846

Cost of revenues

551,812

29,080

(32,258)

548,634

Gross profit

157,368

3,353

(13,509)

147,212

Gross margin

22.2%

10.3%

—

21.2%

Income (loss) from

operations

77,884

(14,638)

(17,778)

45,468

Select Financial Data - CSI Solar and Global Energy

SixMonthsEndedJune 30,Except Percentages)

CSI Solar

Global

Energy

Elimination

and

unallocated

items(1)

Total

Net revenues

1,927

274,983

(152,429)

1,521,481

Cost of revenues

1,390

183,014

(111,332)

1,151,072

Gross profit

319,537

91,969

(41,097)

370,409

Gross margin

22.8%

33.4%

—

24.3%

Income from

operations

162,065

46,192

(49,353)

158,904

(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

June 30,2021

Three Months

Ended

March 31,2021

Three Months

Ended

December 31,2020

Three Months

Ended

June 30,2020

(In Thousands of U.S. Dollars)

CSI SolarRevenues:

Solar modules

843,463

552,247

586,820

597,461

Solar system kits

88,057

36,071

39,071

42,901

Battery storage solutions

68,890

2,358

4,953

-

China energy (incl. electricity sales)

94,347

7,095

15,194

16,141

Others

54,290

20,506

21,999

6,910

Subtotal

1,149,047

618,277

668,037

663,413

Global Energy Revenues:

Solar power projects

266,598

452,847

354,671

2,685

O&M and asset management services

8,607

9,966

8,365

6,321

Others

5,409

8,249

9,581

23,427

Subtotal

280,614

471,062

372,617

32,433

Total net revenues

1,661

1,089,339

1,040,654

695,846

Select Financial Data - CSI Solar and Global Energy

Six Months Ended

June 30,2021

Six Months Ended

June 30,2020

(In Thousands of U.S. Dollars)

CSI SolarRevenues:

Solar modules

1,395,710

1,133,790

Solar system kits

124,128

72,098

Battery storage solutions

71,248

-

China energy (incl. electricity sales)

101,442

19,944

Others

74,796

20,666

Subtotal

1,767,324

1,246,498

Global Energy Revenues:

Solar power projects

719,445

230,438

O&M and asset management services

18,573

11,485

Others

13,658

33,060

Subtotal

751,676

274,983

Total net revenues

2,000

1,481

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

Six Months Ended

June 30,

March 31,

June 30,

2021

2021

2020

2021

2020

Net revenues

$1,661

$1,339

$695,846

$2,000

$1,874

894,737

548,634

2,611

1,072

Gross profit

184,787

194,602

147,212

379,389

370,409

Operating expenses:

Selling and distribution

expenses

83,581

84,080

53,463

167,661

106,122

General and

administrative expenses

68,578

67,457

46,354

136,035

99,315

Research and

development expenses

13,158

12,450

10,924

25,608

20,980

Other operating income

(6,910)

(12,868)

(8,997)

(19,778)

(14,912)

Total operating expenses

158,407

151,119

101,744

309,526

211,505

Income from operations

26,380

43,483

45,468

69,863

158,904

Other income (expenses):

Interest expense

(14,795)

(14,673)

(16,960)

(29,468)

(35,973)

Interest income

2,837

3,248

2,081

6,085

4,859

Gain (loss) on change in

fair value of derivatives,

net

(12,150)

12,572

(2,349)

422

30,759

Foreign exchange gain

(loss),net

8,884

(19,648)

(2,192)

(10,764)

(36,311)

Investment income (loss)

5,154

1,263

1,525

6,417

(12,487)

Other expenses,net

(10,070)

(17,238)

(17,895)

(27,308)

(49,153)

Income before income taxes

and equity in earnings of

unconsolidated investees

16,310

26,245

27,573

42,555

109,751

Income tax benefit (expense)

1,645

(13,852)

(8,899)

(12,207)

20,154

Equity in earnings of

unconsolidated investees

585

1,203

1,739

1,788

1,755

Net income

18,540

13,596

20,413

32,136

131,660

Less: Net income (loss)

attributable to non-

controlling interests

7,279

(9,183)

(191)

(1,904)

425

Net income attributable to

Canadian Solar Inc.

$11,261

$22,779

$20,604

$34,040

$131,235

Earnings per share - basic

$0.19

$0.38

$0.35

$0.57

$2.20

Shares used in computation -

basic

60,288,824

59,862,901

59,371,856

60,077,039

59,539,092

Earnings per share - diluted

$0.18

$0.36

$0.34

$0.54

$2.18

Shares used in computation -

diluted

61,339,043

67,531,709

59,793,196

67,580,787

60,127,369

Canadian Solar Inc.

Unaudited Condensed Consolidated Statement of Comprehensive Income (Loss)

(In Thousands of U.S. Dollars)

Three Months Ended

Six Months Ended

June 30,

March 31,

2021

2021

2020

2021

2020

Net Income

18,660

Other comprehensive income

(net of tax of nil):

Foreign currency translation

adjustment

9,629

(31,702)

30,997

(22,073)

(14,974)

De-recognition of commodity

hedge and interest rate swap

—

—

4,439

—

4,439

Loss on changes in fair value of

derivatives

—

—

(104)

—

(4,115)

Comprehensive income (loss)

28,169

(18,106)

55,745

10,063

117,010

Less: comprehensive

income (loss) attributable to non-

controlling interests

8,760

(15,692)

3,802

(6,932)

2,361

Comprehensive income (loss)

attributable to Canadian Solar

Inc.

19,409

(2,414)

51,943

16,995

114,649

Canadian Solar Inc.

Unaudited Condensed Consolidated Balance Sheets

(In Thousands of U.S.Dollars)

June 30,

December31,

2021

2020

ASSETS

Current assets:

Cash and cash equivalents

$ 814,193

$ 1,178,752

Restricted cash

493,776

458,334

Accounts receivable trade,net

624,754

408,958

Accounts receivable,unbilled

39,478

28,461

Amounts due from related parties

35,721

5,834

Inventories

1,129,964

695,981

Value added tax recoverable

121,956

102,460

Advances to suppliers

178,155

182,146

Derivative assets

3,372

23,351

Project assets

563,245

747,764

Prepaid expenses and other current assets

357,153

353,781

Total current assets

4,361,767

4,185,822

Restricted cash

3,364

2,629

Property,plant and equipment,net

1,397,768

1,157,731

Solar power systems,net

160,263

158,262

Deferred tax assets,net

195,657

170,656

Advances to suppliers

100,042

97,173

Prepaid land use right

71,011

62,414

Investments in affiliates

62,519

78,291

Intangible assets,net

20,444

22,429

Project assets

389,967

389,702

Right-of-use assets

30,555

26,793

Other non-current assets

231,250

184,952

TOTAL ASSETS

$ 7,024,607

$ 6,536,854

Canadian Solar Inc.

Unaudited Condensed Consolidated Balance Sheets (Continued)

(In Thousands of U.S.Dollars)

June 30,

2021

2020

Current liabilities:

Short-term borrowings

$ 867,450

$ 1,202,285

Long-term borrowings on project assets -

current

490,956

198,794

Accounts payable

762,272

514,742

Notes payable

817,037

710,636

Amounts due to related parties

282

314

Other payables

658,279

508,839

Advance from customers

132,619

189,470

Derivative liabilities

6,062

10,755

Operating lease liabilities

11,992

15,204

Other current liabilities

122,027

237,316

Total current liabilities

3,868,976

3,588,355

Accrued warranty costs

49,264

37,732

Long-term borrowings

530,760

446,090

Convertible notes

223,895

223,214

Liability for uncertain tax positions

15,764

14,729

Deferred tax liabilities

49,741

49,080

Loss contingency accruals

29,249

26,458

Operating lease liabilities

18,950

13,232

Financing liabilities

82,692

81,871

Other non-current liabilities

191,057

163,308

TOTAL LIABILITIES

5,060,348

4,644,069

Equity:

Common shares

744,886

687,033

Additional paid-in capital

(22,476)

(28,236)

Retained earnings

974,344

940,304

Accumulated other comprehensive loss

(45,724)

(28,679)

Total Canadian Solar Inc. shareholders'

equity

1,651,030

1,570,422

Non-controlling interests in subsidiaries

313,229

322,363

TOTAL EQUITY

1,964,259

1,892,785

TOTAL LIABILITIES AND EQUITY

$ 7,854

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