The Shawn Qu Story
Much of the following bio is drawn from an article in Canada’s The Globe and Mail by Richard Blackwell.
Dr. Shawn Qu founded Canadian Solar in 2001 with little more than a vision and his personal savings. Just 14 years later the company operates on 6 continents and is set to achieve annual turnover over $3 billion. Last year, 2014, saw the purchase of major US energy developer, Recurrent, and this year brings the listing of an independent Yield-Co. that will offer investors secure, stable returns.
Raised by his parents, both university professors in mathematics, Shawn Qu describes his upbringing in China during the cultural revolution of the ‘60s and ‘70s as “materially poor but spiritually rich”. His parents instilled a love of knowledge in him, while circumstance ingrained frugality. Both attributes have proved fundamental to Canadian Solar’s success, which, while significant, has been far from an overnight affair.
Shawn Qu arrived in Canada in 1987, shortly after the Chinese government first allowed students to leave the country to study abroad. In his mid-20s at the time, he had an undergraduate physics degree from Beijing’s prestigious Tsinghua University and the promise of a scholarship from the University of Manitoba. After completing his master’s degree in physics, Mr. Qu moved to the University of Toronto to do a PhD in materials science. It was here that his interest in solar power first took hold.
After graduation, he took a position at Ontario Hydro (now called Ontario Power Generation) working on a solar power project that was subsequently sold to ATS Automation Tooling Systems in Cambridge, Ont. As luck would have it, ATS had also bought Photowatt, a French solar product manufacturing firm that gave Dr. Qu exposure to yet another culture.
It also gave him a sense of the social value of solar power. One of ATS’s projects was a Canadian government-supported scheme to help with rural electrification in China. His group developed tiny solar cell and battery systems that could power two lamps and a radio. “It was a very interesting project that gave me a chance to visit these remote areas. People really loved it."
"It made me think about how I could do more in solar … I felt fulfillment.”
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 Dr. 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. Dr. 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. 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.
Dr. 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 also 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 Dr. 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.”
Canadian Solar is expanding in Canada, and recently opened a panel-making facility in London, Ontario, in addition to its first panel-making factory in Guelph. The corporate headquarters are also in the Guelph facility, which Dr. Qu visits about once a month.
And, he insists, despite the frequent characterization of his company as Canadian in name only, it really is Canadian. Indeed, the only time he becomes really animated during our chat is when I bring up the company’s nationality. “It is a Canadian company,” he says, his voice rising slightly. “It is registered here. We pay Canadian tax. We have a major operation here. For 2014, Canadian revenue will probably be half of the company’s total revenue. So we do more business in Canada than any other places. So why are we not a Canadian company?”
And, he points out, “lots of companies do manufacturing in China. So what? Look at Apple. Where do they make their cellphones?” In fact, he says, good Canadian companies should be international. “I hope that Canadians will develop this kind of international mindset.”
Dr. Qu, who is a Canadian citizen, does spend the majority of his time in China, where he lives near the company’s biggest manufacturing plant in Suzhou, just outside Shanghai. But he is on the road – or rather in airplanes – a great deal of time, and he uses that time to e-mail and read industry materials.
Okay, you’re an engineer and you work like mad, I acknowledge, but don’t you have any diversions? He said he does take the occasional ski vacation – often in Japan – and he swims every other day when he is at home, putting in 1,000 meters each time at a health club near his house.
Success hasn’t changed him much, although he says he gets less anxious about the business than he once did, since he has delegated a lot of the day-to-day work to his management team. Now he can be the big picture guy.
- Born in Beijing
- 50 years old
- Married with three children
- PhD in material science from the University of Toronto
- MSc in physics from the University of Manitoba
- BSc in applied physics from Tsinghua University in Beijing
- Founded Canadian Solar in Ontario in 2001
- Began manufacturing in China in 2002
- Listed on NASDAQ in 2006
- Opened Canadian Solar’s first a plant in Guelph, Ont. in 2011, then one in London, Ont. in 2014
- Purchased leading US energy developer, Recurrent, for $265 million
- Set to list new Yield-Co.
In his own words
- “My dream was to see solar panels on every household … to create a clean world for the next generation, for our children.”
- “I manage a new economy, new energy, business in a very traditional way. I guess I am quite different from other entrepreneurs who start companies. It is very different from the Facebook style.”
- “The conventional energy industry receives more tax breaks and incentives than the solar industry. People just don’t see them.”
- “We will see costs going down and prices going down, and solar becoming more economic. It will be more and more competitive compared with conventional power sources.”
- “Banks and investors are becoming more familiar with solar. They are starting to see solar as a good investment with very predictable incomes. Financial institutions have started to see solar as an investment grade asset.”