But Mr. Qu admits that, over all, he was bored at ATS, which was losing money on the solar operation and didn’t give it many resources. It was time to venture out on his own.
“All this experience on the technical and manufacturing side, and experience in different cultures – Chinese, Canadian and French – and also experience in government programs, got me prepared to launch my own business.”
He started Canadian Solar in 2001, but at the beginning never dreamed of creating a multi-billion dollar company. “At that time, my vision was probably a small company working on renewables, which [I thought would be] good for human beings and would allow me to feed my family. I am a programmatic engineer. I do it step by step.”
The first step, however, was a big one. A business contact mentioned to Mr. Qu that Volkswagen’s Mexican operation was looking for a solar device to keep car batteries charged when new vehicles were sitting in outdoor parking lots, sometimes for months at a time.
He set to work, came up with a design, and won the contract. “The challenge was that I had a purchase order without a real company. I didn’t even know where the factory was going to be. I had to do my budgeting. Where was the money going to come from, where was the equipment going to come from?”
Canadian Solar ended up building a plant in China, and it lived off the Volkswagen order for a couple of years, shipping hundreds of thousands of units. Mr. Qu created a team, raised money, and in 2004 got another big break when the German government put in place incentives for solar panel installations, opening up an enormous market. The fact that Canadian Solar was already a key supplier to Volkswagen opened a lot of doors. “It meant a lot to my initial German customers. We were at the right place at the right time.”
For the next several years Canadian Solar – and most other solar companies – flourished, as more governments put incentives in place, and sales boomed. The government stimulus that followed the 2008-2009 recession also pumped up the industry, and more and more companies jumped into the fray – an ominous sign.
“In the U.S., they had a recovery plan. In China, they also had a big incentive plan. Everyone had easy access to money and easy access to debt. So, you saw those factories – not just solar factories but all kinds of factories – just mushroom,” he said. “We started to see everyone get into the solar business. The writing was on the wall.”
A perfect storm of issues, including the glut of supply and cuts to European subsidies during the financial crisis, pushed panel prices down and prompted a dramatic shakeout. Some of the biggest players collapsed, along with many small ones, and stock prices tumbled off a cliff. Canadian Solar’s shares went from over $50 in mid-2008 to below $3 in 2012. (They’ve since climbed back to almost $31.)
But Canadian Solar was one of the survivors. A strong balance sheet and conservative capital spending kept it afloat. And the drop in prices meant that solar became more competitive with other conventional forms of energy generation, making incentives less important – a trend that continues today.
Mr. Qu also made a crucial change at Canadian Solar during that period. He decided the company should be not just a cell and panel maker, but 0also get into the business of building solar farms – a segment of the business where the fall in component prices was actually an advantage.
Most of its projects are in Canada, the United States, China and Japan. In most cases, once solar farms are up and running, Canadian Solar sells them to independent power producers who then hold them for the long term.
Kent Brown runs one of those power producers, and his Calgary company BluEarth Renewables is in the process of buying several Canadian Solar projects. He describes Mr. Qu as a “visionary” who was smart to get into the solar business very early on, and then made clever strategic moves to ensure Canadian Solar was a survivor. “He was able to steer that company through difficult times, and come out well ahead of a lot of the other players, really emerging as one of the leaders in the sector,” Mr. Brown said. He is very low key, modest, unassuming, but extremely deliberate and very intelligent.”