Canadian Solar’s battery energy storage business was the standout growth engine in the company’s second-quarter 2026 results, with shipments rising 73% year-over-year and substantially exceeding management’s guidance while contracted storage backlog reached $3.5 billion.
Battery energy storage shipments recognized as revenue totaled 3.7 GWh, increasing 82% sequentially and 73% year-over-year.
Management had guided for only 2.8 GWh to 3.2 GWh of shipments, meaning the actual result exceeded the high end of guidance by approximately 16%.
The company noted that 471 MWh of the 3.7 GWh total was shipped to Canadian Solar’s own projects under execution, with the associated revenue expected to be recognized in future quarters.
The growth is particularly notable because Canadian Solar’s traditional solar-module operation remains under pressure.
Solar module shipments totaled 3.1 GW, increasing 25% sequentially but declining 60% year-over-year.
Total Q2 revenue reached $1.2 billion, increasing 12% sequentially while falling 29% year-over-year. Revenue landed at the top of the company’s $1 billion to $1.2 billion guidance range.
Storage is therefore becoming increasingly important to Canadian Solar’s growth mix.
The company’s e-STORAGE business had a $3.5 billion contracted backlog at June 30, including contracted long-term service agreements.
Canadian Solar emphasized that these are signed, binding customer commitments, providing multi-year earnings visibility.
The broader project pipeline is also substantial.
Recurrent Energy had approximately 22 GWp of solar projects under development and approximately 84 GWh of battery energy storage development projects.
The storage pipeline included about 600 MWh under construction, 4.4 GWh in backlog and more than 79 GWh in advanced and early-stage development.
Canadian Solar’s positive strategic story also includes a major expansion of U.S. manufacturing.
The company officially opened Phase I of its heterojunction solar cell factory in Jeffersonville, Indiana, in July.
The first phase has 2.1 GWp of nameplate capacity and is the first commercial-scale HJT solar-cell manufacturing facility in the United States.
Phase II is expected to add another 4.2 GWp, taking total U.S. solar-cell capacity to 6.3 GWp, with trial production expected to start in the first quarter of 2027.
Canadian Solar is simultaneously expanding its Mesquite, Texas, solar-module facility from 5 GWp to 10 GWp of nameplate capacity, with completion targeted for the second half of 2026.
Management expects the combined footprint to establish CS PowerTech as one of North America’s largest integrated photovoltaic manufacturers.
The quarter’s consolidated profitability was less favorable.
Gross profit declined to $168 million from $271 million sequentially and $505 million in the prior-year quarter.
Gross margin was 13.9%, compared with 25.1% in Q1 and 29.8% a year earlier.
The Q1 comparison was affected by tariff-refund benefits that did not recur in Q2, while the prior-year quarter benefited from the release of unrealized profit associated with sales-type leasing of a U.S. project.
Canadian Solar consequently reported a $77 million GAAP net loss attributable to shareholders, or $1.40 per share, compared with a $32 million loss in Q1.
The company nevertheless ended the quarter with approximately $1.9 billion of cash.
Its Q3 outlook points toward another sequential step-up in business volume.
Canadian Solar expects third-quarter revenue of $1.3 billion to $1.5 billion, gross margin of 13.5% to 15.5%, module shipments of 3.5 GW to 3.8 GW, and battery storage shipments of 3.4 GWh to 3.8 GWh.
The midpoint of revenue guidance, $1.4 billion, would represent approximately 16% sequential growth from Q2’s $1.2 billion.
Management also continues to expect 4.5 GWh to 5.5 GWh of U.S. battery energy storage shipments for the full year.
Canadian Solar expects both U.S. solar and storage shipments to accelerate through the second half, while Recurrent Energy is expected to complete project sales delayed from Q2.
The key positive angle is therefore the company’s rapidly scaling storage platform.
A 73% increase in shipments, performance materially above guidance, a $3.5 billion contracted backlog and an 84 GWh development pipeline suggest that battery storage is becoming an increasingly meaningful counterweight to the volatility of conventional solar-module manufacturing.
KEY QUOTES:
“We achieved 3.7 GWh of energy storage shipments to internal and external projects under execution, serving utility-scale projects across North America, EMEA, Asia Pacific and Latin America.”
“As we double down on our U.S. manufacturing strategy, we continue to rebalance our global project development business and optimize capital allocation across our core growth engines.”
Colin Parkin, Chief Executive Officer of Canadian Solar
“We anticipate the cadence of U.S. solar and storage shipments to accelerate in the second half, with each quarter of 2026 delivering larger volumes than the last.”
Colin Parkin, Chief Executive Officer of Canadian Solar
