Emeren’s earnings followed the same pattern, with earnings before inflation, taxation, depreciation, and amortisation (EBITDA) increasing from a loss of US$2.7 million in the first quarter of this year to a gain of US$3.6 million in the second quarter. This remains lower than the US$8.8 million posted in the second quarter of 2023.
This improved performance has brought the developer’s earnings back into the black, with net income of US$400,000, compared to a net loss of US$5.9 million endured in the first quarter of this year and falling revenue for periods of last year.
In a letter to shareholders, CEO Yumin Liu and CFO Ke Chen attributed this to the expansion of the company’s Development Service Agreement (DSA) and focus on project development. In the second quarter, Emeren sold a 42MW ready-to-build portfolio in Spain to CVE España and completed construction work on a 13MW project in Hungary.
Crucially, sales such as these have not significantly diminished the developer’s operating portfolio, with Emeren’s solar portfolio exceeding the 250MW mark in both quarters of this year, as shown in the graph above. In January, the company acquired an 86MW ready-to-build solar portfolio in Spain, and Emeren plans to expand its portfolio further, with 7.8GW of capacity at the advanced and early stages of development in all three regions where the developer operates.
Emeren noted that, in the second quarter of this year, it had signed agreements with eight DSA partners in Europe to monetise over 2GW of new solar capacity, which is expected to generate revenue of over US$60 million over the next two to three years. In the first half of 2024, the company’s DSA work has already generated US$8.2 million in revenue, more than the US$6.5 million generated by this segment in the entirety of 2023.
However, Emeren plans to add significantly more capacity in Europe and the US than in China, which could reverse the company’s current distribution of operating capacity. Emeren expects to add 5.6GW and 2.2GW of capacity in Europe and the US, respectively, compared to just 82MW in China. This interest in European expansion comes following months of warnings about falling prices and installation rates in the European solar sector, so the presence of new projects could be a benefit for the region’s solar industry as a whole.
The company has similar plans for its storage arm, which began work in the fourth quarter of 2024 with the commissioning of a 15MWh project in China; Emeren plans to add 5.8GW of storage capacity in Europe, 1.9GW in the US and 104MW in China.
