The initial 600 MW can be expanded to 1.2 GW.

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TORONTO, May 31, 2011 /PRNewswire via COMTEX/ —

Canadian Solar Inc. (the “Company”, “we” or “Canadian Solar”) (NASDAQ: CSIQ), one of the world’s largest solar companies, and Suzhou GCL Photovoltaic Technology Co., Ltd., a subsidiary of GCL-Poly Energy Holdings Limited (“GCL”, stock code: 3800.HK), today announced a major solar joint-venture to build a 600 MW capacity wafer plant in Suzhou dedicated to Canadian Solar’s requirements. The initial 600 MW can be expanded to 1.2 GW.

The total capital expenditure for the first phase of the project is approximately US$77 million, which is expected to be financed 33.3% through the registered capital and 66.7% through debt. Under the terms of the agreement, GCL will contribute 90% of the registered equity, and Canadian Solar will contribute 10%.

Mr. Gongshan Zhu,Chairman and CEO of GCL, said, “We are very pleased to be partnering with Canadian Solar on a long-term basis. This partnership with Canadian Solar, one of the industry’s most innovative leaders worldwide, is central to our ability to strategically expand our manufacturing capacity and to reach our growth targets. We have worked together for three years now, sharing both a commitment to high-quality and service. Our teams boast industry leading technical expertise, customer support and sales acumen. Our respect for each other will help us achieve further success on this expanded scale.”

Dr. Shawn Qu, Chairman and CEO of Canadian Solar, said, “This is a major strategic development for Canadian Solar, GCL and the broader solar industry. This joint-venture will supplement our other wafer arrangements and make Canadian Solar fully prepared to compete at 2GW scale by early 2012. In GCL, we gain a valued long-term partner, with essential large scale manufacturing expertise. We expect this venture to help further lower our manufacturing costs from the first quarter of 2012 onwards, and further improve Canadian Solar’s gross margins, with a minimal capital expenditure requirement. Importantly, by securing high-quality wafers we can support the increased demand levels for our high-quality solar module products which we are seeing from customers in solar markets worldwide. We look forward to a successful cooperation with GCL in the years ahead.”

Canadian Solar remains on track to expand its annualized capacity for solar cells to around 1.3GW to 1.4GW by mid-2011. In addition, Canadian Solar also plans to announce a joint venture to build a 600MW solar cell facility that will enable it to reach approximately 2GW of internal solar cell capacity during the first quarter of 2012. The Company is also on track to reach 2GW of annualized capacity for module lamination by mid-2011. As a result, the Company is on track to achieve a 2GW ‘virtual vertical integration’ from wafer to cell and module at the beginning of 2012.

The Company would like to reiterate that its internal cell and module capacities, which are 220MW and 350MW for the second quarter of 2011, respectively, are currently running at full utilization rates, reflecting the strong endorsement of Canadian Solar products in the marketplace. The percentage of third-party cells vs. internally produced cells in the second quarter of 2011 is expected to be higher than that in the first quarter of 2011 due to the full utilization of the Company’s module capacity. However, the Company still expects to maintain a similar or improved blended gross margin in the second quarter of 2011 compared to the first quarter of 2011 based on its trend forecast for third party cell and wafer prices.

About GCL-Poly Energy Holdings Limited (stock code: 3800.HK)

GCL-Poly Energy Holdings Limited is China‘s largest polysilicon producer, one of the world’s leading wafer suppliers, and a top green energy enterprise in China. Annual polysilicon production capacity is expected to reach 46,000 MT by the end of 2011, and the quality of its polysilicon products has reached electronic grade level. The Group’s wafer production capacity will achieve 6.5 GW by the end of 2011. In addition to the 6MW in operation in the U.S., the Group owns a 20MW solar farm in Xuzhou, Jiangsu province, which is currently the largest solar farm in China.

For more information about GCL-Poly, please visit the company’s website at www.gcl-poly.com.hk.

About Canadian Solar

Canadian Solar Inc. (NASDAQ: CSIQ) is one of the world’s largest solar companies. As a leading vertically integrated provider of ingots, wafers, solar cells, solar modules and other solar applications, Canadian Solar designs, manufactures and delivers solar products and solar system solutions for on-grid and off-grid use to customers worldwide. With operations in North America, Europe and Asia, Canadian Solar provides premium quality, cost-effective and environmentally friendly solar solutions to support global, sustainable development. For more information, visit www.canadiansolar.com.

Safe Harbor/Forward-Looking Statements

Certain statements in this press release including statements 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 the risks regarding the previously disclosed SEC and internal investigations as well as general business and economic conditions and the state of the solar industry; 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 Germany; 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; 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 originally filed on May 17, 2011. 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. You 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.

SOURCE Canadian Solar Inc.