On February 11, Canadian Solar released an announcement regarding the progress of "Lease Contracts" signed between its subsidiaries and related parties, constituting related-party transactions.
According to the announcement, in response to the provisions of the U.S. "One, Big, Beautiful Bill Act" and to ensure compliant operations and eligibility for tax credits in the U.S. and overseas markets, Canadian Solar is undertaking a deep structural adjustment of its overseas assets. This is being achieved through a dual approach involving equity transfers and concurrent leasing arrangements.
Tailored Strategies for the U.S. and Thailand: A Differentiated Operational Restructuring
The core of this structural adjustment lies in a transition from a traditional heavy-asset operating model to a more flexible joint venture and leasing model. As of December 31, 2025, Canadian Solar has completed the signing of four key lease contracts, restructuring its factories in the U.S. and Thailand through differentiated strategies. Additionally, a supplementary agreement involving a factory in Thailand is scheduled to be finalized in April 2026.
In the U.S. market, the company has adopted a strategy of "joint venture operations combined with comprehensive leasing." Under this arrangement, the controlling shareholder, CSIQ, and the company have established a joint venture to handle actual production. This joint venture entity will lease the workshops, facilities, and equipment previously invested in and constructed by Canadian Solar.
This arrangement primarily covers two core assets:
The module factory (USMM), which achieved full production in mid-2025 with a designed annual capacity of 5GW.
The solar cell factory (USCM), expected to reach production in mid-2026 with a designed annual capacity of 2GW.
This signifies that Canadian Solar will increasingly assume the role of an "asset holder" in the U.S., generating stable revenue through rental income.
By contrast, the restructuring in the Thailand market focuses on deep integration at the equity level. Controlling shareholder CSIQ has acquired a 75.1% stake in Canadian Solar’s established subsidiary in Thailand, converting it into a joint venture. Under this model, the scope of leasing is limited to the land, workshops, and facilities involved in specific wafer slicing (THWT) and battery manufacturing (SSTH) operations.
Locking in Long-Term Returns: Five-Year Terms and Floating Rent Mechanisms
Although the operating models in the two regions differ, Canadian Solar has maintained a high degree of standardization regarding the specific terms of the lease agreements. The lease terms for relevant equipment and workshops in both the U.S. and Thailand are set at five years, and both utilize a "base rent + floating mechanism" pricing structure. Specifically, once the factory’s actual output reaches 80% of its designed capacity, the rent will increase by 10% over the base price, with no further adjustments thereafter.
However, there are significant differences regarding rights and ownership: the U.S. contracts explicitly stipulate that, provided the lessee is not in default, they possess the right to renew the lease or a right of first refusal to purchase upon expiration. Conversely, the contracts for the Thai operations make no explicit commitments regarding renewal or purchase rights.
Projected Pre-Tax Profit Increase of Over 400 Million RMB in 2026
This series of complex capital operations is expected to generate substantial financial returns for Canadian Solar, transforming what were originally fixed assets into a source of stable cash flow.
Financial projections indicate that, based on the aforementioned lease arrangements, Canadian Solar expects to realize approximately 1.165 billion RMB in rental income for the fiscal year 2026.
U.S. Operations: The module and battery businesses will contribute the majority share, projected to generate 586 million RMB and 537 million RMB respectively.
Thailand Operations: The photovoltaic wafer slicing and battery businesses are expected to generate 8 million RMB and 34 million RMB in rent respectively.
After deducting relevant depreciation and interest, the leasing business is expected to contribute approximately 431 million RMB in pre-tax profit for the year. This move serves as a crucial stabilizer for the company in navigating trade barriers and securing overseas earnings.
Source：EnergyTrend
