Thank you, operator, and welcome, everyone, to Canadian Solar's second quarter 2026 conference call. Please note that today's conference call is accompanied with slides which are available on Canadian Solar's Investor Relations website within the events and presentations section.

Joining us today are Colin Parkin, CEO; Dylan Marks, CEO of Canadian Solar's subsidiary, Recurrent Energy; Xinbo Zhu, senior VP and CFO; and Dr. Shawn Qu, executive chairman and CTO.

All company executives will participate in the Q&A session after management's formal remarks. On this call, Colin will deliver key messages for the quarter.

Dylan will share updates for Recurrent Energy. Xinbo will go through the financial results, and Shawn will discuss sustainability and technology highlights.

Colin will conclude the prepared remarks with the business outlook, after which we will have time for questions. Before we begin, I would like to remind listeners that management's prepared remarks today, as well as their answers to questions, will contain certain forward-looking statements that are subject to risks and uncertainties.

The company claims protection under the safe harbor for forward-looking statements that is contained in the Private Securities Litigation Reform Act of 1995. Actual results may differ from management's current expectations.

Any projections of the company's future performance represent management's estimates as of today. Canadian Solar assumes no obligation to update these projections in the future, unless otherwise required by applicable law.

A more detailed discussion of risks and uncertainties can be found in the company's annual report on Form 20-F, filed with the Securities and Exchange Commission. Management's prepared remarks will be presented within the requirements of SEC Regulation G, regarding generally accepted accounting principles, or GAAP.

Some financial information presented during the call will be provided on both a GAAP and non-GAAP basis. By disclosing certain non-GAAP information, management intends to provide investors with additional information to enable further analysis of the company's performance and underlying trends.

Management uses non-GAAP measures to better assess operating performance and to establish operational goals. Non-GAAP information should not be viewed by investors as a substitute for data provided in accordance with GAAP.

Now I would like to turn the call over to Canadian Solar's CEO, Colin Parkin. Colin, please go ahead.

Thank you, Winna, and thank you all for joining our second quarter earnings call. Beginning on slide 3, we recognized on 3.1 GW of solar modules, within guidance.

We exceeded our storage guidance, shipping 3.7 GWh and recognizing revenue on 3.3 GWh within the quarter. Revenue totaled $1.2 billion, at the high end of guidance.

Gross margin was in line with guidance at 13.9%. Profitability was impacted by elevated freight costs from ongoing geopolitical uncertainties.

We also faced near-term ramp-up costs from our solar cell manufacturing facility in Jeffersonville. These factors led to a net loss attributable to shareholders of $77 million, or $1.40 per share.

Turning now to slide 4. Our manufacturing segment remains the key driver of our financial performance today.

It is also where our strategic priorities lie. In our solar business, we continue to prioritize high-margin regions.

We shipped nearly half of our quarterly module volumes to our North America home base. In our energy storage business, we are scaling rapidly and executing well globally.

In a single quarter, we delivered to utility-scale projects across North America, EMEA, Asia Pacific, and Latin America. We outperformed guidance due to accelerated deliveries for two projects in the US and Canada.

Higher unit shipping costs and ramp-up expenses led to an operating loss of $49 million. As we finish ramping phase 1 of our solar cell facility and expand through phase 2, these costs will normalize.

We expect overall module margins to improve as a result. Now turning to slide 5.

A major highlight this quarter was the official opening of our state-of-the-art HJT solar cell facility. This marks a historic milestone.

Canadian Solar is now the first commercially operational HJT manufacturer in the United States. We're also proud of the facility's meaningful impact and contribution to the local economy and community.

We are currently ramping up phase 1 capacity to 2.1 GW peak. Phase 1 is set to enter full-scale production on October 1st.

Before the end of the year, we will begin installing equipment for phase 2, which will bring our Jeffersonville total nameplate cell capacity to 6.3 GW peak in 2027. This facility will be the largest crystalline silicon cell manufacturing plant in North America.

Paired with our 10 GW peak module facility in Texas, CS Powertech solidifies its place as one of North America's largest and premier integrated photovoltaic manufacturers. These expansions are backed up by strong customer demand for our high-performance US solar products, which offer valuable domestic content benefits.

Turning, please, to slide 6. CS Powertech has secured over 13 GW peak in contracted backlog for our domestically manufactured HJT and TOPCon N-type bifacial modules.

Deliveries are scheduled through 2029. This backlog includes multiple long-term master service agreements with leading US utilities, IPPs, developers, and EPCs.

These commitments continue to grow daily, and already represent north of $4.5 billion in value. On the policy front, President Trump released a new Section 232 announcement this month, which is focused on imported polysilicon and its derivative products.

We view this new policy structure as supportive of our long-term investment in domestic manufacturing. Key details include minimum import pricing, tariff provisions, and potential manufacturing offsets for companies investing in domestic manufacturing capacity.

The Department of Commerce will work to approve US investment plans. We will continue to be active, constructive, ongoing dialogue with Department of Commerce, and will continue to participate throughout the 120-day implementation period.

Our current evaluation indicates that these measures will reinforce US solar pricing, and we are actively working with our customers to navigate this period of uncertainty. Overall, we view this policy direction as net positive for Canadian Solar, and we welcome the administration's support for American industrial growth.

Now turning to slide 7. For e-STORAGE, we shipped 3.7 GWh of energy storage solutions this quarter, and recognized revenue on 3.3 GWh, after accounting for the more than 400 MWh to internal projects under execution.

At the end of this quarter, our contracted backlog stood at $3.5 billion. This includes long-term service agreements covering 34 GWh of contracted projects.

We see demand from data centers transitioning from conversations to contracted opportunities. Earlier this year, e-STORAGE secured a contract with a major US utility for a 500 MW, 2.5 GWh DC project designed to support data center grid infrastructure and resiliency.

Energy-intensive data centers and their stakeholders face two primary hurdles: securing power and maintaining grid stability. Interconnection approvals and transmission builds require years to complete.

Battery energy storage unlocks the higher through-put throughput from existing infrastructure, responds dynamically to load swings, fortifies grid resilience, and protects mission-critical computing hardware from power disruptions. For on-site behind-the-meter facilities, energy storage integrates seamlessly with other energy generation technology, including natural gas and renewable power generation.

We are actively engaging with data center hyperscalers, developers, and utility customers to deliver solutions that help overcome these challenges. Our market value extends well beyond supplying battery containers.

We produce our own battery cells, design the SolBank platform, integrate the power conversion and proprietary energy management controls, and deliver full EPC and commissioning services, and provide ongoing support through long-term service agreements. This end-to-end full stack model offers customers a single accountable partner while supplying us with real-world operating data to refine future solutions.

Now let me hand the call over to Dylan to review updates for Recurrent Energy, Canadian Solar's global project development business. Dylan, please go ahead.

Thank you, Colin. Starting on slide 8, we generated $117 million of revenue in the second quarter.

Revenue declined sequentially, primarily because several project sales moved into the second half of the year. Electricity sales revenue rose quarter-over-quarter, supported by the commercial operation of a large solar asset in Spain.

With muted project sales during the quarter and a $24 million impairment charge related to an upcoming project sale in Latin America, operating expenses rose quarter-over-quarter. As a result, we recorded an operating loss of $19 million.

Despite the lowered financial performance, we continued to hit key operational milestones throughout the second quarter. Earlier in the quarter, we brought a 426 MW solar asset in Spain into commercial operation, which began contributing recurring energy.

Our partnerships with leading global technology companies further validate our development platform. In Australia, we recently connected the 150 MW Carwoola project, which is backed by a long-term power purchase agreement with Microsoft.

We also continue to secure competitive large-scale project financing. Recently, we closed a $695 million construction and tax equity package for a 330 MW Cobalt solar facility in California.

MUFG and Nord/LB provided the construction loans, while Wells Fargo provided the tax equity. Turning to slide 9 for our portfolio pipeline update.

As of June 30, 2026, we have secured grid grid interconnections for approximately 6 GW of solar and 13 GWh of energy storage globally, excluding projects already in operation. Our total development pipeline stands at nearly 22 GW of solar and 84 GWh of energy storage.

Our strategy for this pipeline remains focused on high-quality, high-margin opportunities that drive real value. We are actively pruning lower-margin assets.

For instance, we scaled back our EMEA pipeline, following detailed evaluations of permitting, technical, and commercial viability. At the same time, we are moving decisively where we see attractive upside.

Our team is actively positioning us to compete in Brazil's upcoming energy storage auction, which expanded our early-stage pipeline in Latin America. For the second half of the year, our priority remains the selective monetization of certain operating assets, under-construction, and development assets.

These transactions are intended to support our capital recycling strategy, improve financial flexibility, and address leverage levels over time, while preserving our ability to invest in high-return growth opportunities. Now let me hand the call over to Xinbo, who will go through our financial results in more detail.

Xinbo, please go ahead.

Thank you, Dylan. Beginning on slide 10.

In the second quarter, we recognized revenue on 3.1 GW of modules and 3.3 GWh of energy storage solutions, both sequentially higher. Module performance was bolstered by strong US volumes, while storage beat guidance due to accelerated project deliveries in North America.

Despite light contributions from Recurrent due to deferred project sales, solid execution in the manufacturing segment lifted total revenue to $1.2 billion, reaching the high end of our guidance. Gross margin was 13.9%, in line with guidance.

The sequential and year-over-year margin drops reflect two non-recurring items. First, the tariff refund benefit recognized last quarter, and second, the release of unrealized profit upon sales to third parties of US projects in the prior-year period.

Operating expenses rose 21% sequentially. This was driven by a combination of elevated freight rates and non-logistic ramp-up costs at our Jeffersonville solar cell plant.

Net interest expense rose to $43 million from $36 million in the first quarter, primarily due to lower capitalized interest. We recorded a net foreign exchange loss of $9 million, primarily driven by strong appreciation in the Chinese yuan.

CSI Solar recorded a $41 million mark-to-market gain in investment income from its equity investment in a battery equipment company, helping buffer our bottom line. As a result, Canadian Solar recorded total net loss attributable to shareholders of $77 million, or $1.40 per share.

Now let's turn to cash flow and the balance sheet on slide 11. Net cash flow used in operating activities during the second quarter of 2026 was $181 million, driven primarily by change in working capital.

Total assets grew to $16.1 billion. This increase primarily reflects ongoing construction of US solar and storage projects, along with inventory expansion to support our US manufacturing strategy.

Total debt increased to $7.1 billion, mainly from non-recourse construction financing for solar and storage projects under Recurrent Energy in the US. As we monetize operating, under-construction, and development assets, we expect to deleverage the project development business.

At the same time, our manufacturing segment will take on incremental debt to fund strategic US manufacturing investments, which we expect to expand profitability and cash flow in 2027 and beyond. Capital expenditures in the second quarter were $172 million, primarily directed toward our US manufacturing initiatives.

We anticipate full-year 2026 CapEx to total around $1.3 billion. This implies higher capital outlays in the second half as we begin phase 2 equipment installation at Jeffersonville, double capacity at our Mesquite module plant, and scale up our energy storage facility in Southeast Asia.

We closed the quarter with a cash balance of $1.9 billion, providing us with solid liquidity to execute on our strategic priorities. Now let me turn the call to Shawn, who will discuss our sustainability achievements and the technology roadmap.

Shawn, please go ahead.

Thank you, Xinbo. Turning to slide 12.

In June, we published our 2025 Corporate Sustainability Report. This highlights our commitment to driving the global clean energy transition through sustainable and responsible business practices.

The report tracks our focus on value-driven growth. Notably, the Science Based Targets initiative has validated our net-zero greenhouse gas target.

We also advanced our resource efficiency, achieving significant energy and water savings, alongside two zero-carbon factory certifications. Furthermore, we reinforced our supply chain transparency and ethical labor standards.

These efforts are backed by independent audits and certifications across our manufacturing footprint and key suppliers. Overall, this report demonstrates that environmental stewardship, social responsibility, and strong governance are fundamental to how we build long-term stakeholder value.

At the core of everything we do is technological innovation. Turning to slide 13.

We continue to execute on a multi-generation technology roadmap across both solar PV and energy storage solutions. Starting with solar PV, our near-term priority through 2028 is the mass production and optimization of our next-generation HJT, or heterojunction, and TOPCon architectures.

Across our core utility, C&I, and residential markets, we are scaling module efficiency from 23.2% up to 24.4%, with aggressively reducing, while aggressively reducing silver consumption from 6.5 mg per watt down to 3 mg per watt to drive down this key input cost. Looking slightly further ahead, we expect mass production of our premium TBC architectures by 2028.

Designed primarily for the premium residential market, TBC aims to deliver efficiencies between 24.8% and 25.2%, with ultra-low silver usage of just 1 to 2 mg per watt. Beyond terrestrial single-junction silicon, where we approach physical limits at around 25% to 26% module efficiency, we are expanding into frontier applications and multi-junction technologies.

We have already began collaborating on space PV opportunities, using our HJT cell technology, with planned shipments in 2029 to for extreme space environment, where radiation tolerance and thermal cycling resilience are critical. For long-term utility-scale expansions, our our ultimate efficiency frontier lies in tandem cells, targeted for commercial shipments in 2030, to break through the 30% module efficiency barrier.

Given that perovskite reliability will require another 5 to 10 years of validation before large-scale ground deployment, space applications may well serve as the initial commercial stepping stones to these next-generation tandem structures. Turning to our energy storage and power electronics roadmap on slide 14.

We are building a foundation for sustainable, high-density, and long-duration storage assets. We are currently mass producing SolBank 3.0, which delivers 5 MWh in a standard 20-foot enclosure using 314 Ah LFP cells.

We will soon begin shipping the next iteration, SolBank 4.0, starting 2027. This solution increases energy density by 25%, delivering 6.25 MWh in the same 20-foot footprint, utilizing high capacity 588 Ah LFP cells.

To complement these larger battery systems, our power electronics hardware is scaling in tandem. We are transitioning from our air-cooled mid-voltage skid 1.0 to our liquid-cooled mid-voltage skid 2.0, which integrates 32 of 450 kW inverters to achieve 14.4 MW in a 40-foot layout.

Further out on our 2030 roadmap, we are exploring solid-state transformers, a 2.5 MW, 34.5 kV AC to 800-volt DC solutions, achieving over 98.5% conversion efficiency, that has the potential to replace traditional PCS unit and integrate directly into BESS platform as cost and reliability mature. To address long-duration storage and harsh environment requirements at a potentially lower levelized cost of storage, or LCOS, we are actively validating our containerized sodium-ion platform.

This would eventually deliver a an exceptional cycle time of over 15,000 cycles. Sodium-ion technologies offers compelling structural advantages: abundant raw materials free from geopolitical restraints, superior performance in extreme cold temperature, and simplified cooling requirements that could meaningfully reduce long-term operational expenditures.

It also delivers important safety advantages, such as significantly reduced thermal runaway risk. We are also developing a high-capacity energy storage product designed for deployment inside AIDC server room to deliver millisecond-scale energy management solutions.

Ultimately, unifying these solar and storage developments advances our vision of Canadian Solar as a total energy technologies provider. By pairing these technology roadmaps with robust end-to-end capabilities and full visibility across our supply chains, we are uniquely positioned to deliver the mission-critical clean energy infrastructure of tomorrow to our global customers.

We will unveil more cutting-edge energy technologies in the future, stay tuned. Now, let me turn the call back to Colin, who will conclude our guidance and business out who will conclude with our guidance and business outlook.

Colin, please go ahead.

Thank you, Shawn. Turning now to slide 15.

For the third quarter of 2026, we expect to recognize revenue from 3.5 to 3.8 GW of solar modules. We expect energy storage deliveries to range between 3.4 and 3.8 GWh.

Driven by sequentially higher manufacturing volumes, we project third quarter revenue to be between $1.3 and $1.5 billion, with growth gross margin expected to range between 13.5% and 15.5%. We anticipate US solar and storage shipments to accelerate in the second half, with each remaining quarter delivering higher volumes than the last.

At Recurrent, we expect to finalize project sales delayed from the second quarter. This will drive a sequentially stronger third quarter.

For the full year of 2026, we reiterate our US volume guidance of 6.5 to 7 GW of module shipments and 4.5 to 5.5 GWh of energy storage shipments. With that, I would now like to open the floor for questions.

Operator, please go ahead.

thanks so much, guys. Shawn, as you look at the the roadmap that you just articulated from the technology perspective, um it's pretty robust.

There's a lot of activities. How I want to understand two dynamics: one, um just trend lines on overall uh spending on the R&D line to bring all of this to fruition.

Then, secondarily, where um from a regionalization perspective, where is that work going to happen, and where is the IP going to sit um, as you you bring, looks like, five or six pretty significant um, technology evolutions to market?

Colin. Thank you.

Um because our revenue base is big, uh although the R&D uh spending is significant, but usually typically is around 1% to 2% of the total revenue. We're controlling it uh well.

In from a

from an IP perspective, where is that going to sit in in the US? Is it going to sit uh outside the US?

Um is that not a concern? Is it more around um you know just know-how and and and understand how to manufacture these things where you guys feel like you have an advantage?

Uh Colin, this is this is a good question. Yes, we develop uh more and more the manufacturing uh and also uh process R&D capabilities uh in the US.

We will see more and more IP uh sit with uh the uh in US. Meanwhile, we also uh develop a lot of good technology in Canada.

I also see uh more and more IP sit in Canada, especially the IP related to the power electronics and, either from inverter to the PCS, or the uh energy storage uh system.

Excellent. Then just the follow-up here is really around uh shipping expense and, kind of practical ways that you guys can manage that, or start passing that on in a more material way to customers here over the next 6 to 12 months.

Uh good morning, Colin, thanks for the question. Uh Colin here.

Uh regarding the the shipping expense, yeah, we we do uh we do build that into our contracts and pass that along. Of course, uh the dynamic of the shipping uh cost uh logistics costs start to change when you look at us uh continuing to scale in North America.

Obviously, we don't have the uh as uh significant overseas freight, we'll start to see that uh shipping cost uh start to uh uh decrease uh just as uh uh primarily due to the onshoring in in uh in the US.

Okay. Thanks, guys.

Thank you.

Hey, uh thanks for taking the questions and uh for the color on on the new bookings. One question on that, you talked about the 13 GW of bookings through '29, and the pricing seems to be in mid-$0.30s per watt.

Uh could you clarify like if uh that already includes any um impact of this new Section 232 on polysilicon? Uh if not, then what prices are you seeing, and is there any flexibility to go to the existing customers and uh um on higher prices or if the spot prices move up on Section 232?

Thanks.

Good good morning, Maheep, uh thanks for the question. Colin here.

Uh and and we have Thomas on the line as well, but I'll I'll start. Um, our contracts are are structured with uh with change in law and and uh and adjustment mechanisms uh with with all this anticipated.

What we see is uh this is all very new. I think, as this is only fresh in the last couple of weeks with the new Poly 232.

We've already see the market adjusting. We think it's uh it will definitely drive for accelerated deliveries in the uh second half of uh of this year uh in advance of the the proclamation implementation, I think on December 4th.

We're going to see a rush. With that, we it's it's driving uh uh increase in uh in in in in price and demand and and correlating demand.

Uh we are seeing that start to adjust. We are seeing the market start to adjust, but it is a relatively new change to to the market.

I think uh overall from Canadian Solar standpoint, with the that backlog that we mentioned, the 13 GW uh backlog, um it it shows a strong demand for our our US-based products, and our customers are certainly willing to work with us as they have to adjust as well. Um Thomas, uh would you add anything to that?

If you have anything to add on top of that?

Sure. Good morning.

Um Colin, it's spot-on. The only comment I would make is that this backlog, and the respective revenue value, does not include the 232 adjustment yet.

This is going to increase and grow further as we're adjusting contracts and agreements with customers. It includes, of course, um a certain portion of down payments, certain shipment cost.

Um, some are further away, some are closer away, you can take that all into account. The 232 announcement will push the respective value upwards as we discuss and readjust and renegotiate with customers.

Hope this answers. Um that's

great. Thanks for the color.

Um maybe just like a different follow-up on the tariff uh or the duty exemption uh uh in lieu with domestic CapEx. Um just want to understand like how much do you uh would we expect on that for you guys uh uh for CapEx?

Uh can there I think there was some language on that the exemption is only applicable for new CapEx? Just curious if the R&D CapEx would be uh would be could be used for that or uh the cell CapEx?

Thank you. Uh um

the um Poly 232 uh does allow the uh US manufacturing project to offset the uh tariff on duties. As uh Colin said, we will actively engage with uh Department of Commerce.

I think we are in a good standing. Uh uh we'll try to uh like uh um go through this process.

Yes, we will apply apply for the tariff and uh and the and MIP exemptions related to our US manufacturing uh

plants. Thanks.

Uh and thanks for the color. I will jump back in the queue.

Thank you, Maheep.

Hi, everyone. Thank you for taking my questions.

Um as a follow-up to Maheep's uh second question on the tariff rebate program, Shawn, you just mentioned that you have good standing with uh the Commerce Department. I was wondering if you might be able to elaborate on that.

Specifically, uh do you expect to qualify for the tariff rebate program? Um and if so, uh can you give us some color on um on on why and how?

Thanks.

We do expect we qualify. Uh we qualify for the uh uh tariff relief uh program because uh we are the one who uh invested and really invested into US manufacturing through our uh uh solar module factory in Mesquite and also the solar cell factory in uh Jeffersonville, plus the uh energy storage factory in uh in Shelbyville.

We are putting real dollars into onshoring the uh US manufacturing. We believe we are qualified.

However, as I mentioned, uh we will go through the process. I guess uh I shouldn't uh uh comment too much before I finish this, before we finish the uh dialogue and the process with uh Department of Commerce.

Okay. Uh thank you.

Then earlier, uh Colin and Thomas talked about pricing um already moving. Um and so was wondering if you guys might be able to quantify the magnitude of the price increase that you've seen um thus far and then where you expect things to change.

If your existing bookings are at X, do you think you know we see a $0.05 move in in pricing to the upside, or do you think it's $0.10 or or maybe more? Thanks.

Uh

Philip, I I think we're uh just like everybody else, we're we're monitoring the market and seeing what the opportunity looks like. I think it might be a little premature for us to speculate how fast uh those changes and how how in the magnitude.

Um so I think, we're only a week or two into uh into this new uh new proclamation. We're still waiting for, as a matter of fact, uh expecting new guidance to come.

That could also shape uh shape things as well. I I'd I'd hesitate to give a a specific amount, but I can tell you that we we do feel it's going to be accretive to uh to uh CS Powertech overall.

Okay. Thanks, Colin.

One one last follow-up. As it relates to the back to the tariff rebate program based on US CapEx, what happens and what do you guys do if you cannot qualify for that tariff rebate program?

It's a good question. Uh I think the MIP requirements will uh help to uh to uh to uh strengthen the US manufacturing's uh advantages.

Overall price will go up. If the overall solar module price go up, it will help us, uh even in the case that uh we don't fully, receive the rebate related to our CapEx.

Overall, with or without rebate, we think that uh this decision will be, accretive to CSI to uh CS Powertech and uh any uh real, meaningful manufacturers uh investing in through US.

Great. Appreciate the color.

Thank you, Shawn. Thanks, uh Colin, as well.

Thank you, Philip. Appreciate the questions.

thanks for taking my question. Uh would like to uh uh uh ask management about um the uh recent policy coming out from the White House last night uh on the uh bulk-power uh system.

Would like to know, uh because uh Canadian Solar actually have uh uh battery cell and pack plant in the US, what's your view on uh uh complying to that uh US manufacturing requirements, uh especially in relation to uh energy storage?

Alan, uh I uh I would like to just hold off responding on that because it's it's something very new, and we haven't had a chance to fully study that. Uh I I I will just generally say that uh uh in in all respects, our our ability to uh to comply to to US requirements uh is strong, generally, because of our uh our supply chain has already evolved to supporting the domestic content requirements.

Uh our uh our US manufacturing plans have been structured around that. I don't want to comment on on on such a recent policy change, but uh I would only say that at the moment, I expect we'll be able to uh to address uh any changes.

Understood. Understood.

Uh regarding to another um uh previous uh FCC uh uh investigation, I think there were uh uh clarifications, I think in 20th of August, uh on uh basically, uh for inverters that were produced in the US and is eligible for 45X would not be classified as as foreign-produced. I recall the company previously was uh having third-party uh as a as a supplier for uh inverters, but also the company is also uh starting to do PCS as well.

Wonder uh if uh management has any comments in regards to FCC uh previous uh uh uh restrictions on on on this front.

Alan, uh a good question. Uh first of all, for our our inverters uh are not currently being moved into the US, it's not an issue for us in terms of our our current supply chain.

Uh but, as you mentioned, we do uh procure significant amounts of third-party inverters, uh PCS, for example. We are actively involved with our um uh our supply chain to ensure that they meet all the FCC requirements uh and uh or have have uh uh the path to have those FCC requirements in place.

We don't see any uh issues with any of our our business activities at this time related to the the recent changes. I know they just uh uh there's just recent clarification provided with respect to the uh the communication protocols, which we're looking at very carefully, but we don't see any impact to uh to our business at the moment with respect to the new FCC requirements.

I would like to add a little color comment on top of what Colin just said. We also noticed the uh require the uh the uh in the new uh new guidance, and FCC said anything qualified for the 45X, which means qualified for the local manufacturing, and eligible for 45X will be considered domestic, therefore, uh will not require FCC approval.

I think this is a very interesting uh uh very interesting uh uh policy uh clarification. As you mentioned, uh we do have our own PCS.

Uh we have that technology centered in Canada. Uh we have started to actively look into the feasibility of manufacturing uh that PCS and inverters in US, uh utilizing the advantage that uh Canadian Solar already have.

Yes, Polytech, which is uh um uh the 45X qualified uh structure uh in US. Yes, we are actively uh reviewing the the uh feasibility of that.

Thanks. That's very clear, because I recall the company actually got uh a very strong record in uh US manufacturing, and has already secured 45X credits for other products like module already.

That might actually be the a positive of an opportunity for the company to take share, so that this is why the question's coming from. Uh so, uh switching gear to uh the uh technology pass, because uh noticed that uh Shawn has uh spent quite a lot of uh time.

Uh I think that is quite new, I think, uh uh in this uh quarterly results uh uh briefing. Uh would like to know, uh because uh Shawn has mentioned about space PV, I I suspect if there's has already been some form of discussion with uh major clients in the aerospace industry, or it's more a product development stage, or there's are actually already some uh early-stage uh navigation already?

Uh space PV is a very interesting direction. Although I don't expect it to, contribute meaningfully this year or next year, but in the long run, uh space is what everybody looking at, including uh Canadian Solar and I myself.

You realize that Canadian Solar is a strong uh mhm like, participant in the so-called uh uh HJT, or heterojunction uh uh solar cell architecture. This is what uh the industry consider very favorable for silicon-based uh space PV applications.

Uh the research so far uh shows that the so-called P-type heterojunction will have better tolerance to the high-energy, particle uh radiation bombardment in the space. Therefore, P-type uh heterojunction, especially the thin uh P-type uh heterojunction, is considered to be a leading candidate for uh silicon-based uh solar cell application in the space.

We do manufacture uh the uh P-type, as our Jefferson solar cell factory uh adopted the P the uh heterojunction uh the uh HJT uh solar cell structure. Far, we use N-type for the uh uh for the uh terrestrial application.

However, it's very easy for us to convert that into P-type. We are we already use very thin wafers, and the wafer uh to be processed in our uh Jeffersonville factory uh average at 110 um micron thickness, which is one of the thinnest uh wafer used for, commercial production.

Now also on the R&D side, we have uh uh we have uh uh provide you know uh uh designed and uh processed the uh even thinner, thinner to 50 micron uh wafer thickness with a P-type heterojunction and very successful. Uh we can supply that, we are at the leading front of space uh uh PV.

Now we are talking to other uh space and uh satellite, especially the satellite companies uh uh about this application. Uh we are collaborating.

Now I can't uh disclose the customer names for now, but yes, uh we have uh close collaborations with uh like, space uh uh related uh uh partners.

Understood. Uh it's also interesting that uh uh in your view on space PV is on HJT.

Uh having mentioned about HJT, um there there is some market views that uh TOPCon might have some issues in relation to the Section 337 uh patent on investigation. Uh is it one of the reasons that you are selecting HJT uh technology in the US, because it it's not the mainstream technology outside of the US, or it's a really other reasons, like labor or shorter production process?

We choose HJT heterojunction for the US actually for several reasons, not one reason. Uh so number one, yes, our strong R&D effort already into uh it HJT solar cell.

As a matter of fact, uh we have studied uh the HJT's uh structures as early as uh 2018, uh 2017 and 2018. Uh we have been uh doing pilot-line HJT development uh for six, seven years already, we have very strong knowledge.

That also explain why our ramp-up of the Jeffersonville uh solar cell line was so far successful, and I would say pretty smooth. Any ramp-up will have some uh we'll hit some issues.

That's the point of the of the ramp-up, right, which is to discover and uh resolve and solve uh any issues. Our ramp-up in Jeffersonville uh was very successful.

That's the technical side. Uh second, uh the uh our HJT process uh is very it's more um like, equipment-dependent than human-dependent.

It does require much less uh operators than the TOPCon, and we think this is a specific this is a very unique uh advantage for the US uh manufacturing. IP is also an issue, no question about it.

On one hand, we are fully confident that our H our TOPCon technology uh stand alone on its own fit, on its own feet, and uh not uh uh have not have any uh conflict with uh uh other companies' uh uh TOPCon IPs. However, less IP conflict is also is even better.

Uh the uh H the HJT uh uh IP is clean, much cleaner than uh TOPCon. That's also one reason uh for our decision to select H HJT uh for the uh for US uh cell manufacturing.

It's a multiple there's quite a few factors. All in all, we uh believe that HJT is a good technology.

Also, as I mentioned, HJT is a leading candidate for the space uh application. We also considered this factor uh when we make the this decision uh two around two years ago.

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