Canadian Solar Inc. (CSIQ-Q) reported net revenue of $1.2 billion in Q4 (all figures US), a 20 per cent decline from the year prior, as sales of the Kitchener, Ont.-based company’s solar modules and battery energy storage systems slumped.

The solar module manufacturer and developer, owner and operator of solar and battery energy storage projects announced a net loss of $86 million in the last quarter of 2025, compared to net income of almost $34 million in Q4 2024.

Solar module shipments totalled 4.3 gigawatts (GW)-worth in Q4, down 47 per cent year-over-year.

Canadian Solar's shares were down over 20 per cent as of publication time following the release of its latest financial results.

Noting a year marked by “persistent market headwinds and a shifting regulatory landscape,” Canadian Solar is moving away from a focus on shipment volumes to prioritizing margins and diversifying profit drivers such as its energy storage business, chairman and CEO Shawn Qu said in a release.

U.S. solar tumbles on government casting a shadow

The decline in sales felt by Canadian Solar reflects broader pressure on the renewables industry in the U.S., which makes up a sizable portion of the company’s business.

The U.S. solar industry saw a 14 per cent decrease in installed capacity from 2024 to 2025, the Solar Energy Industries Association reported earlier this month. It particularly impacted the utility-scale sector, which shrank nearly 40 per cent quarter-over-quarter in Q4.

The One Big Beautiful Bill Act signed into law in July 2025 phased out several tax credits for solar projects, the association said, hurting the industry. Project developers reconsidered their projects and a rush to complete home installations was limited by a shrinking window of opportunity and equipment shortages.

Additionally, the administration of U.S. President Donald Trump applied tariffs on solar equipment and has been a vocal opponent of green energy, applying further uncertainty.

Canadian Solar plans for larger U.S. factories

Though the U.S. market lost its shine in 2025, Canadian Solar said it delivered a record 8.1 GW of solar module shipments to the U.S. that year. It also delivered a record 7.8 gigawatt-hours (gW-h) of energy storage equipment to the world in 2025.

Energy storage is one of Canadian Solar’s bright spots, with double-digit growth in shipments and a contracted backlog worth $3.6 billion, Colin Parkin, president of Canadian Solar and its subsidiary e-STORAGE, said in the announcement.

“As we direct our resources toward our comprehensive U.S. manufacturing strategy, we are proactively rebalancing our project development investments to optimize cash flow and manage leverage," he said.

Canadian Solar looks to aim its efforts on strategic markets, rather than aggregate global manufacturing capacity, the company said.

Canadian Solar will maintain its interest in U.S.-based manufacturing, as it plans to double the nameplate capacity of its Mesquite, Texas solar module factory to 10 GW peak by H2 2026 and bring its new solar cell factory in Jeffersonville, Ind. to 6.3 GW peak of nameplate capacity by the end of 2026.

Canadian Solar’s project pipeline

The company’s solar pipeline as of Dec. 31, 2025 was 24.4 GW peak; its energy storage project pipeline was 83.5 gW-h.

Canadian Solar projected its Q1 revenue to be between $900 million to $1.1 billion. Module shipments recognized as revenues are expected to be between 2.2 GW to 2.4 GW; energy storage shipments in the range of 1.7 gW-h to 1.9 gW-h.

The year 2026 “will be a transition year,” Qu said, “as we accelerate our U.S. manufacturing roadmap and diversify our long-term profitability drivers."