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A large, ground-mounted solar farm with photovoltaic panels produced by Canadian Solar Inc. in Guelph, Ont.

Canadian Solar Inc.

Canadian Solar Inc. is a homegrown multinational in the fast-growing solar power business.

But the Guelph, Ont.-based company faces new challenges after the World Trade Organization (WTO) issued a final ruling in May that Ontario's Green Energy Act violates international trade agreements. The act pays lucrative prices for renewable power on the condition that 60 per cent of content was sourced in the province – a provision that violates international trade agreements, the WTO said. Ontario has said it will comply with the WTO decision.

"The impetus for having a plant in Guelph was certainly the local incentive," Canadian Solar marketing vice-president Adam Stratton said. Without that incentive, the company will face new challenges but the company has built an integrated business model that Mr. Stratton said will serve it well in the global market.

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Installers in Canada and other markets are willing to pay a premium for Canadian-made solar panels because of their reliability, he said. At the same time, Canadian Solar not only produces photovoltaic panels but manufacturers silicon ingots in China and develops solar energy projects in Ontario and elsewhere, creating its own demand.

The company has projects totalling 802 megawatts in the pipeline, including major developments in the Canada, United States, China and Japan. And while cash-strapped governments are revisiting subsidies paid to solar around the world, the company expects the market to continue to expand as countries such as Japan move away from nuclear and China is desperate to generate clean power to address its pollution crisis.

Trading on the Nasdaq exchange in New York, Canadian Solar is Canada's largest solar panel manufacturer and ranked third in the world last year; it employs 400 workers at its Guelph manufacturing plant and 10,000 people in 19 countries.

Canadian Solar is a success story for the Ontario Liberal government's renewable energy policy, which aimed to build a manufacturing base in the province by offering preferential rates. Critics say the policy has come at a huge cost by helping to drive up electricity prices that undermine the competitive position of energy-hungry industries. But Mr. Stratton said the renewable sector is no more subsidized than nuclear or the fossil-fuel industry, and that the solar industry in particular has made great strides in reducing costs.

"The industry here can play an important role in the creation of jobs and has done so up to this point within the renewable energy sector," he said. "Ontario itself has the capability when working with solar energy companies to not only continue the growth of the energy mix for the province but to innovate and export to the world."

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