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A Better Solar Company

Rachel Chamberland, Alex Diaz, Amanda Lui, Kevin Satre


Global Trends : World Energy
Consumption

$44
billion

Source : Energy Information Administration


http://www.eia.doe.gov/emeu/aer/pdf/pages/sec11_3.pdf
Global Trends : Market
Outlook

Source : European Photovoltaic Industry Global Market Outlook


http://www.epia.org/fileadmin/EPIA_docs/public/Global_Market_Outlook_for_Photovoltaics_until_2014.pdf
Global Trends : Government
Initiatives
Germany Germany 2010 :
2009 : €20
€100 million for
billion for solar R&D
US 2009 : 10 renewable
million energy
Japan 2009 : $21
Solar Roofs billion for
Act residential solar
US 2010 : $6 power
billion France 2010 :
world’s €1.35 billion
largest solar S Korea 2010 : $36
clean energy billion for clean
plant
US 2009 :
$52.5 million energy
for R&D
China :
planned $739
North Africa billion
2009 : $5 billion investment
solar energy into
renewable
energy
Recommendations

Acquisition: U.S. Brand Building:


•Largest global energy Italy
•Expand presence
consumer •Differentiation
•Market expansion
opportunity

Analysis Recommendatio Financials Timeline Conclusion


ns
Agenda

Analysis

Recommendations

Financials

Timeline

Conclusion

Analysis Recommendations Financials Timeline Conclusion


SWOT Analysis

Analys Recommendations Financials Timeline Conclusion


is
Competitive Advantage :
Porter ’ s
Competitive
Low Advantage
Cost Higher Cost

Ta
rg Differentiation
Broad

Cost Leadership Strategy


et
CHINESE COMPANIES :
Ma
rk
et

PRICE WARS
Focus Strategy Focus Strategy
Narrow

(low cost) (differentiation)

Analys Recommendations Financials Timeline Conclusion


is
Macro Factors Considered

Government Policies Entry Mode Method

Financing Currency

Liability of Foreignness Risks

Analysis Recommendatio Financials Timeline Conclusion


ns
Recommendations :
U . S . Acquisition
United States Market
Outlook

Source : European Photovoltaic Industry Global Market Outlook


http://www.epia.org/fileadmin/EPIA_docs/public/Global_Market_Outlook_for_Photovoltaics_until_2014.pdf

Analysis Recommendatio Financials Timeline Conclusion


ns
Acquisition : Project
Developers

Analysis Recommendatio Financials Timeline Conclusion


ns
Recommendations :
Brand Building in Italy
Italy Market Outlook

Source : European Photovoltaic Industry Global Market Outlook


http://www.epia.org/fileadmin/EPIA_docs/public/Global_Market_Outlook_for_Photovoltaics_until_2014.pdf

Analysis Recommendatio Financials Timeline Conclusion


ns
Italy : Expand Presence

July 10: New office The Future is Brand Advertising


Bright High School
Contest
•Addition of new •Promote recycling, •Trade shows
sales compost, energy •Advertisements
representation saving
•After Sales Support •$20,000 solar
panels prize
•Positive community
connection

Analysis Recommendatio Financials Timeline Conclusion


ns
Italy : Differentiation

After Sales Support


•Support center for customers in Italy

Superior Product
•Porter’s generic strategy

Analysis Recommendatio Financials Timeline Conclusion


ns
Financial Implications
Financials : Italy
Costs

Your Future is Bright Contest


Lombardy* $20,000
Sicily $20,000
Lazio $20,000
Compania $20,000
Veneta $20,000
Additional $20,000
Additional Sales Advertising
Representation
Investment $1,000,000

Total $(1,120,00
0)

Analysis Recommendations Financials Timeline Conclusion


Financials : Italy ROI
Increase in Projected
Revenue

Analysis Recommendations Financials Timeline Conclusion


Financials : United
States Costs

Average Acquisition Size


Acquisition Cost $85 million

Canadian Solar Ideal


Acquisition Cost $40-$45 million

Analysis Recommendations Financials Timeline Conclusion


Financials : United
States ROI

Assumption : acquisition of one company


per year
Analysis Recommendations Financials Timeline Conclusion
Conclusion
Timeline : 2010 - 2015

2010 2011 2012 2013 2014 2015

ales Force Expansion


Acquire projectHarness
developer
project pipeline

Evaluate
Future is Bright Contest

roject development Harness


Acquire acquisitions
project project pipeline
developer Reduce expansion efforts

Analysis Recommendations Financials Timeline Conclusion


Conclusion

I think that our fundamental


belief is that, for us,
growth is a way of life and
we must grow at all times.
- Mukesh Ambani

Analysis Recommendations Financials Timeline Conclusion


Questions?
Many thanks to our Research Associate Pascale Chamberland !
Appendix
Appendix
•Global Trends: •Boston Consulting Group Analysis
•World Energy Consumption •Evolution of PV Market
•Market Outlook •The Market
•Government Initiatives •Entry Mode Selection
•Agenda •Risks
•Analysis •Currency: CAD/EUR, CAD/USD
•SWOT •Your Future is Bright Contest
•Porter’s generic strategies •U.S. Acquisition Opportunities
•Recommendations •Vocabulary
•Factors Considered •International Trade Shows
•U.S. Acquisition •Competition
•Market Outlook •Additional Financials
•Potential Project Developers •SWOT Analysis
•Italy Brand Building •Germany
•Market Outlook •China
•Expand Presence •Japan
•Differentiation •United States
•Financials: •Italy
•Italy: Costs, ROI •South Korea
•US: Costs, ROI •Czech Republic
•Timeline •France
•Spain
•Canada
Appendix : Current Market
Boston Consulting Group
Analysis
Relative Market
High Share Low

?
United
Ma States
rk Italy France
High

et Czech
Gr Republic
ow South Korea
th Japan
Ra
te
Germany
Canada
China
Low

Spain
Appendix : Future Market
Boston Consulting Group
Analysis
Relative Market
High Share Low

Ma
rk United
?
France
South Korea
High

et States
Gr
ow
th
Ra
te
Germany
Canada Spain
China Czech Republic
Low

Italy Japan
Appendix : Evolution of PV
Market
Appendix : The Market
Appendix : Entry Mode Selection

Strategic Goals & Location-specific Advantages

Equity Non-equity

Wholly owned subsidiaries


Partially owned subsidies Exports Contractual agreements

Source : Peng, Michael. Global Business (2008).


Appendix : Risks
Appendix : Currency
CAD to Euro — 5 years
Appendix : Currency
CAD to USD — 5 years
Appendix : Your Future is
Bright Contest

• Contest to promote environmental awareness in


high schools as well as brand recognition for
Canadian Solar.
– Host in 5 most populous regions regions:
• Lombardy, Sicily, Lazio, Compania, Veneto
– Judge based on 1 month:
• Recycling
• Composting
• Energy Saving
• Schools will fill out weekly progress profiles with details and
pictures of the initiatives they have taken.
• Best school will be selected by managers in the Rome office
and will win solar panel installation worth $20,000 for their
school
Appendix : U . S . Acquisition
Opportunities

• Enerize Corporation- Florida


• Gold Coast Solar- California
• Emmy Energy- New York
• Home Energy New York – New York
• Clean Power Design- Missouri
• Green Wind and Solar- Oklahoma

Appendix : Vocabulary

• Net-Metering Scheme: Owners of


renewable energy sources collect
retail credit for any excess energy
they produce.
• Grid Access: network connecting
consumers and suppliers
• Feed-in Tariff: Political policy to
encourage use of renewable energy:
– Subsidies for participating companies
– Grid access for renewable energy
– Net-metering
– Enacted in 63 jurisdictions as of 2009
Appendix : International Trade
Shows

December 2010 : CanSIA Solar Conference Ontario, Canada


(plans to attend)

May 2011 : Solar Expo Verona, Italy


International Exhibition & Conference on Renewable
Energy and Distributed Generation

June 2011 : Intersolar Europe Munich, Germany

Nov 2011 : International Solar Energy Exhibition Milan, Italy


Appendix : Competition Trends

Solar World, Q-Cells

Suntech

Differenti
First Solar Yingli Sharp
Trina Solar Sanyo
Sunpower

ation
Appendix : Financials
U . S . ROI

Judging by the total of 850 billion worth of acquired private


companies, and a total of 10,013 companies having been acquired (avg. of
$85 million per company), we judge that the companies we would acquire
would be between $45-$60 million.
In United States, with acquisitions we would capture another 2% of the
market share. In 2009 we had revenues of almost $37 million in the
United States (with a 4% market share) and with an additional 2% of
the market share we could increase revenues by $55 million every year.
In 2009, US spent $18.6 billion on renewable energy. Approximately 30%
of that was solar power (.3*18.6= $2.75 billion). Our approximated gain
in market share of 2% gets us another $55 million in revenue each
year from the United States alone.
This increases our yearly revenue from United States to about $92
million dollars (almost a 250% increase in revenue).
Additional Note: United States is a rapidly expanding market for
solar power.
We could potentially break even after the first year, depending on the
size of acquisition.
Appendix : Financials
Italy Campaign Costs

Advertising Campaign in Italy- $20,000 per regional winner (5 total


regional winners)
Five biggest regions – Lombardy*, Sicily, Lazio, Compania, Veneto.
Additional $20,000 for getting the word out about competition.
Judging by the total of $850 billion worth of acquired private
companies, and a total of 10,013 companies having been acquired, we
judge that the companies we would acquire would be between $70-$85
million.
*Lombardy will be the starting point. Assuming “Your Future is Bright”
goes well, there will be four more contests implemented over the
course of a year.
-Return on Investment- Matching these “advertising expenses” against
the revenues they generate is nearly impossible and susceptible to
poor estimates and “bad accounting”
-However, it is possible that increasing our investment in the
sales force in Italy will double or even triple our market share if we
act quickly.
Additional $1,000,000 for more in the sales force in Rome, Italy.
Appendix : Market in Germany
Appendix : Market in China
Appendix : Market in Japan
Appendix : Market in United
States
Appendix : Market in
Italy
Appendix : Market in South
Korea
Appendix : Market in Czech
Republic
Appendix : Market in France
Appendix : Market in Spain
Appendix : Market in Canada
Appendix : Main Sources

• US Energy Market World Data, 2th Edition, SBI, June 2010



• Canadian Solar Website & Financial Statements

• Renewable Energy Country Attractiveness Indices, Ernst &
Young, August 2010

• Global Outlook for Photovoltaic Until 2014, EPIA, May 2010