ReneSola Ltd (SOL) on Q2 2021 Results - Earnings Call Transcript
Operator: Ladies and gentlemen, thank you for standing by for ReneSola Power's Second Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. Please note that we are recording today's conference call. I will now turn the call over to Mr. Gary Dvorchak, Managing Director of The Blueshirt Group Asia. Please go ahead.
Mr. Gary Dvorchak: Thank you, Tara, and hello everyone. Thank you for joining us on today's call to Discuss Second Quarter 2021 results. We released our shareholder letter after the market closed today. It's available on our website, results with a supplemental slide-deck posted on the website that we will reference during our prepared remarks. On the call with me, today are Mr. Yumin Liu, Chief Executive Officer, Mr. Ke Chen, Chief Financial Officer, Mr. John Ewen, CEO of North America. Before we continue, please turn to Slide 2. Let me remind you that remarks made during this call may include predictions, estimates, or other information that might be considered forward-looking. These forward-looking statements represent ReneSola Power's current judgment for the future. However, they are subject to risks and uncertainties that could cause actual results to differ materially. Those risks are described under Risk Factors and elsewhere in ReneSola's Power's filings with SEC. Please, do not place undue reliance on these forward-looking statements which reflect ReneSola Power's opinions only as of the date of this call. ReneSola Power is not obliged to update you on any revisions to these forward-looking statements. Also, please note that unless otherwise stated, all figures mentioned during the conference call are in U.S. dollars. With that, let me now turn the call over to Mr. Human DU. Human.
Mr. Yumin Liu: Thank you, Gary. And thank you, everyone, for joining the call. I will summarize our financial performance. I will review our operating highlights in the quarter. I will then turn the call over to Ke, who will cover financial results in more detail and will also provide 20-21 guidance. We will then open the call to questions. In Q2, we again focused on profitability and delivered excellent bottom-line performance. A gross margin of 61% was well above expectations. We spend much slated solid execution of our strategy to focus on product sales and on PP, GAAP, all pretax income was 7.3 million up significantly both sequentially and year-over-year. EBITDA of 9.5 million increased by more than 140% from Q1. Importantly, we reported our fifth consecutive quarter of profitability with a net income of 7 million or $0.10 per ADS. Q2 also marks the most profitable quarter since we've divested the manufacturing business to become a pure-play project developer in the third quarter of 2017. You will notice that revenue was down both sequentially and year-over-year. Why are we so excited about our results when revenue was lower? Our excitement, in precise, is the most important point label to make about how we run our business. Pure and simple, we focus on the bottom line. While we can never guarantee it, we intend to be profitable every quarter whether our revenue is up or down. We are confident in our ability to do this because of our unique fortified business model. First NTP sales drive growth in our business. We have realigned our strategic focus to make more sales at NTP. The margins are better. Project sales are large but somewhat unpredictable and will vary as you saw this quarter. But over time, as we grow our pipeline, we expect product sales to drive strong and sustainable growth to the bottom line. Second, our IPP segment provides a baseline of stable and highly profitable electricity sales. Quarter-in and quarter-out. This foundation delivers consistent income enables us to plan our business. I have a shareholder. You'll also judge our performance the way they judge ourselves. We should be profitable whether the revenue is up or down. The pipeline should be growing constantly over time. And the gross margins should be trending up over time, and we ship more products sales to NTP. In addition, you also see our operating expenses growing in line are this lower than pipeline growth. The pipeline is closely tied to the investment they make in development and sales. So, these two metrics will always be closely correlated. Let me now discuss recent operating highlights in more detail. First, our development pipeline remained strong. We grow our mid-to-late-stage project pipeline from 1.3 gigawatts in Q1 to 1.6 gigawatts by the end of Q2. The expanded pipeline of business activity indicates greater demand for projects, as well as greater execution by our teams in steel Colby, challenge the environment. Our focus is profitable markets, including the U.S. and Europe, where we see tremendous growth opportunities with high-quality projects. Second, we successfully closed the sale of our 38-megawatt portfolio of solar projects in Poland, and a 5-megawatt portfolio of projects in May and recognize revenue for both sales in Q2. The Poland projects were sold to opt-in a leading international solar investment Company based in Denmark. The projects were sold at the NTP stage, and ReneSola Power is responsible for EPC management, project financing, and final delivery of the projects to opt-in that a COD. Against that success, the closing of the Spain product sale was delayed. Promised schedule time in the first half of 2021, causing our revenue to be lower than originally planned. The sale is expected to be closed within the next months and will be recognized for revenue in the third quarter of 2021. Third, we were awarded 29 projects with a capacity of 1 megawatt each, and when small, you could get a skilled project with a capacity of 4 megawatts in Poland's existing auction in June. These 30 projects are under Poland's CFD regime and eligible for a 15-year guarantee term. The projects are expected to be connected to the grid within the next 2 years. Fourth, we further strengthen our financial position by paying off, short-term debt of 11.8 million in the quarter. As a result, we further enhance our capital structure with a debt-to-asset ratio of 16% down from 19% in Q1. We have a healthy balance sheet with a strong cash position of 286 million. We intend to use our cash to expand our solar project pipeline for working capital and for potential strategic M&A opportunities. Speaking of M&A, we are actively pursuing several opportunities. We are making progress and intend to provide more details on our next earnings call. We believe the capital raised at the beginning of 2021 will enable us to execute our long-term strategic growth plan. As we further consolidate our transformation into an ice daylight solar project at the Wattenberg. Subsequent to Q2, we signed a strategic partnership agreement with Amarin, a UK-based project developer focused on the development of the Noble Energy power plants. As part of the JV agreement, ReneSola Power and Amarin intend to develop projects in a broad range of sizes across Italy. With a target of reaching 110-megawatt projects by 2022, We are excited to partner with Emeren. The co-development agreement aligns with our growth strategy, enabling us to expand our project development activities in Italy. Italy is the first market for the JV to tap into. And we look forward to pursuing other opportunities to co-develop our projects across the rest of Europe. Moving on, I will now update you on our project pipeline. At quarter-end, our mid to late-stage pipeline was 1.6 gigawatts, up from 1.3 gigawatts last quarter. As we grow our pipeline, we are allocating resources to the markets with the best profit potential. Our objective is to add an incremental project pipeline in our core markets to reach 2 gigawatts by the end of 2021. And we are on track to achieve this target. Let's review highlights from the certainty job of these. First, let's turn our attention to the U.S. showing us 7. Our late-stage pipeline is 470 megawatts, on which 82-megawatts are coming to solar in Maine, Minnesota, and New York. Additionally, we had projects under development with a mix of corporate, municipal, and utility off-takers in other states, such as California, Pennsylvania, Florida, Illinois. Meanwhile, we operate 24 megawatts of small utility-scale projects in North Carolina. In Poland, shown on slide 8, our key asset is our portfolio of products rates. We have a pipeline of 339 megawatts of ground-mounted projects under development and construction. Slide 9 refers to Hungary, where we also invest in small-scale DG projects. Our pipeline has a combined capacity of 42 megawatts in the country. Those projects are under development. Slides 10 and 11, detail our pipeline in France and Spain. We have 100 megawatts in France and have expanded our pipeline in Spain from 180 megawatts to 216 megawatts. We continue to gain traction in Germany, where we are building quality projects. As shown on slide 12, we have a product portfolio targeting 62 megawatts up from 50 megawatts last quarter. In the UK, shown on slide 13, we have a project pipeline of 281 megawatts, including solar-plus-storage projects. Additionally, we intend to capture opportunities in other European countries, such as the Czech Republic. We will provide more details on these new opportunities when the proper rate. In China, as highlighted on Slide 14, we have our late-stage pipeline of 88 megawatts of commercial rooftop projects located in various signs of progress. In addition to our development pipeline, we operate a portfolio of 170 megawatts of solar projects that generate high-margin recurring revenue. And you'll see on Slide 16, our operating assets, including 146 megawatts of commercial rooftops in China and 24 megawatts of utility solar in the U.S. In China, we intend to expand our IPP assets in the Yangtze delta area, which has attractive electricity tariffs. We are being cautious and deliberate as we prepared to build and operate commercial rooftop projects. We are very disciplined about profitability and are only selectively pursuing high-quality, profitable projects. In summary, the momentum we are seeing in our business continues to reflect solid demand in the markets we serve, the resiliency of our business model, and the outstanding execution of our team. In addition to growing our business, we are also looking for ways to build up better ReneSola Power for our employees, customers, partners, shareholders, and society in general. We recognize that our role in shaping a future of sustainability brings important responsibilities. We are committed to building a sustainable and fair future. We are helping adjust global uses such as climate change and focus on the need for social justice, equality, and human rights. Importantly, we are making progress in the areas of environmental scholarship, social solidarity, and corporate governance. With that, we believe that now is a good time to provide our first ESU report, which we'll issue in the second half of the year. Taking such an initiative reflects our commitment to becoming a more sustainable and socially responsible business. And we look forward to your input once our report is publicly available. Let me now turn the call over to our CFO, Ke Chen, for comments on our financial performance. Ke?
Mr. Ke Chen: Thank you, Yumin. And thanks to everyone for joining us on the call today. Our shareholder letter and the supplemental slides accompanying all the figures and the comparisons you need. I'm not going to repeat every number, instead, I'm going to focus on the factor that influenced results. As I speak, please keep in mind that we will discuss certain non-GAAP financial measures. We use non-GAAP measures because we believe they provide useful information about our operating performance that should be considered by investors, along with the GAAP measures. The non - GAAP to GAAP reconciliation is included in our shareholder letter. Let's begin with our Q2 financial highlights on Slide 18. Revenue of the US $18.5 million was down both sequentially and year-over-year. The decline was due to the Spain project sales moving into Q3 from Q2, as we originally planned. As we noted regularly, our revenue can vary quarter-to-quarter because of the timing of sale closings. Most importantly, we judge our success over long time periods based on bottom-line profit and pipeline growth. Revenue this quarter was mainly from the sale project in Poland and the U.S. and from power generation in China. More than 70% of revenue was from the U.S. and Europe. Gross profit of U.S. dollar 1.3 million was up from last quarter and up for the same period last year. The gross margin was 61% compared to 30% in Q1 and 28% in the same period last year. Q2 gross margin was carrying well ahead of our guidance range of 36% to 39% The increase was due to higher contribution from NTP sales. Moving down the P&L, non-GAAP operating expenses up 30% sequentially, and up 66% year-over-year. G&A expenses were up due to the increased employee-related expenses. Notice that G&A expenses were up just 9% from the Q1 level while our middle to late-stage project pipeline grew by more than 20%. This demonstrates the significance of operating leverage in our business. Non - GAAP operating income was the U.S. $8.8 million compared to 4.6 million last quarter and 6 million in the same period last year. GAAP operating income was U.S. $7.3 million and GAAP operating margin was 39% While operating income was the US $0.2 million compared to low operating expense of 2.9 million loss quarter and low operating expense of 0.9 million in the same quarter last year. We had a foreign exchange translation gain, which was caused by the appreciation of the Euro against the U.S. dollar. This led to an exchange gain on the balance sheet. All this resulted in GAAP net income attributed to ReneSola Power of $7,000,000. That profit margin was over 37%. Earning ADS on a GAAP basis was $0.10. This is a record level since we became a pure-play project developer. Now let's review the balance sheet shown on Slide 21. At quarter-end, we had cash and an equivalent of more than the U.S. $286 million. As Yumin mentioned, we paid off our high-interest short-term debt of 11.8 million in Q2. Our long-term borrowings of 69,000 were flat when compared to Q1. Please, note that nearly all our debt is project-based and non-recourse. Also, I would like to highlight that our debt-to-asset ratio is only 16% for the improvement in our capital structure. This also represents as well the north debt-to-asset ratio when compared to other solar industry players. On Slide 32, we generated a cash flow from operations of 600,000 in Q2. And we do expect to generate a positive cash flow from operating activities for the remainder of 2021. Now, let's cover 2021 guidance as shown on Slide 26. For the full year 2021, while we continue to expect total revenue in the range of US $90 to $100 million, we are raising our gross margin outlook and expect the gross margin to exceed 30% compared to prior guidance of over 25%. And we estimate a profitable full-year 2021 with a significant appropriate gross compared to 2020. For the third quarter, we are guiding revenue in an of range of U.S. $1.19 to $21 million. And our gross margin is in the range of 36% to 40. Our 2021 outlook has two key factors. First, the COVID lighting and global economic conditions remain highly uncertain. We continue to monitor how the health aspects of the delta variants are playing out as well as the effect on the economy. While we anticipated some slowdown in activity in some geographical regions, we expect to see a good recovery in several key markets around the world in the second half of the year. In short, I believe it's prudent to factor in border variability in our outlook. Second, we considered a normal partition typical of the product development cycle. We focus on straight bets for solar markets; Europe, U.S., and China. And if you are optimistic about our long-term . We will now like to open up the call for any questions that you may have for us. Operator, please go ahead.
Operator: Thank you. We will now begin the question-and-answer session. Our first question comes from Amit Dayal at H.C.W. Please go ahead.
Amit Dayal: Thank you. Good afternoon, everyone. With respect to sort of your projects in China what are the plans to grow beyond sort of the 100 megawatts, did you have plans for declining by the end of this year? Just in a larger sense, what are your ambitions with China are and what type of projects you might consider pursuing in that market going forward?
Mr. Yumin Liu: Okay, so a very good question, Amit. Thank you. They do set up our goal early this year to build a 100-megawatt project, which we still call light IPP in China. As I mentioned earlier, we are being cautious and deliberate as we prepare to build and operate those commercial rooftop projects in China. In fact, we are very proud of our disciplined approach. The disciplined approach includes the most important two factors. One is profitability and one is the sensitive Yaldey Delta area is the focus. Since early this year, the development condition has changed. Now we think we are revising our target to do in China. We plan to build 100 to 150 megawatts all projects expected to end of 2022. We still consider China as an important market for us, and with the great support from the Chinese government around renewable energy. We believe China will become an important contribution to our both the top line-bottom line.
Amit Dayal: I understood. And then just going back to the second quarter margin performance, really strong margins this quarter. Was this associated with any one group project or are you enjoying sort of these high margins across all NTP sales making?
Mr. Yumin Liu: You are absolutely right, Amit. That is why we're about 12, 18 months ago, we say it would do NTP sales. Have we focused on our NTP sales? Bottom line and the high-margin, it is the case that most of the NTP sales provide us a very attractive gross margin. It is absolutely the case.
Amit Dayal: Okay. Thank you.
Mr. Yumin Liu: And by the way, let me -- I have one other point. As I mentioned earlier, that in Q2, our -- we have no COD sale, we only have the Poland and U.S. NTP sales. That drives the overall margin really high, around this 61% as we presented.
Amit Dayal: Okay, understood. That's what I was trying to understand. So, you had indicated that in the previous call that the second half would be COD heavy, but it looks like the -- basing your margin guidance, it seems you might see good contribution from NTP in the second half also?
Mr. Yumin Liu: Absolutely, yes, that's true. That we continue focusing our NTP sales. That as you also have -- you can notice that our Q3 profit margin that you guided is definitely a little bit lower than the Q2 factual margin. One of the reasons is we do expect a sale of projects at the COD. Which is the COD sale normally bringing to us higher top-line revenue, that lower percentage of the margins. But the -- going into the future, starting from Q4, we'll have more and more sales on NTP not at COD anymore.
Amit Dayal: Okay, understood. Just one last one from me. On the operating cost side, I know your operating costs are going to get higher, and how should we think about operating costs for the remainder of the year? Should we -- Are these expected to come in sort of at the same 2Q levels or do you see some improvements on that front?
Mr. Yumin Liu: Yes, Amit. I think from SGIA's cost point of view, I think it will be similar to this quarter.
Amit Dayal: Okay. Thank you. That's all I have thanks.
Operator: Our next question comes from Pavel Molchanov, from Raymond James. Please go ahead.
Pavel Molchanov: Thanks for taking the question. Three months ago, I remember we had a conversation about what's happening in the supply chain with polysilicon, steel, glass, every other input cost was escalating. And it seems like in the last 60 days, we've seen a bit of a reversal in the supply chain with cost starting to come down. Is that consistent with what you are observing?
Mr. Yumin Liu: Thank you, Pavel. Absolutely that's the case. Back to 3 months ago when we discuss the cost increase from the supply chain, we believed it is a short-term issue. Six to nine months towards the later part of this year, we should see the supply chain will get picked up and the price will go down. As such, actually, we are planning our execution level activities as you know, for example, we -- although we do most NTP sales that will also help our final partner or buyer of the projects to manage the whole UPC services, including procuring modules. So, for that purpose, we are managing those procurements accordingly based on our understanding.
Pavel Molchanov: Well, let me also ask about the project pipeline. As I look at the list, country-by-country, Poland is now the second-largest portion of your pipeline behind the U.S. What specifically about Poland made it such a significant part of your project portfolio?
Mr. Yumin Liu: Very good question. Poland has been one of the most important contributions we received in the past few years for the Company. Not only we've been working there for the last more than 4 to 5 years, building our local understanding, and invest in our local teams, either way, they do have the largest team in Europe in Poland. And we are doing across-the-board from Greenfield to the partnership of joint development and also the active acquisition of projects and portfolios. And we have the local understanding. We also have a very strong local reputation. That is the internal side. And outside, Poland is one of the European countries that absolutely need strong development of renewable energy. Its coal-fired power generation still stands for the majority of the power generation, over 70%. And European Union has mandated Poland to go more aggressively toward renewable energy. We see great potential in this market. That's why we are not only building up our very strong local team but also have put our resources focusing on the greater development to acquisition with the same market. We believe this market will continue a strong strength of development in the next years in the future.
Pavel Molchanov: Got it. Thank you very much.
Mr. Yumin Liu: Sure. Thank you, Pavel.
Operator: . Our next question comes from the line of Philip Shen at ROTH Capital Partners. Please go ahead.
Philip Shen: Hi guys. This is Donovan on for Phil. Congratulations on the profitability of the quarter. I wanted to ask you about the implied Q4 guidance, so I guess implied revenue guidance is about 30 to 40 million and an implied gross margin for Q4. But I think you can have a pretty good range but I think it would sort of need to be north of 20% like that would be a floor to maybe 30, but couldn't be lower than 20%. Am I thinking about that right for Q4? I just wanted to check on that.
Mr. Yumin Liu: Could you repeat your question? It's not clear.
Philip Shen: Sure. So, for Q4, the implied revenue guidance I'm getting is about 30 to 40 million, you know, triangulating between your '21 guidance and your Q3 guidance. And then the gross margin, I think would have to be, let's call it, in the 20% to 40% range. Going to know the wide range, but it's kind of putting some downs on it. Am I thinking about that right?
Mr. Yumin Liu: Yes. You're right at this point.
Philip Shen: Okay. And then the larger revenue number in Q4, I am guessing that's reflecting maybe more COD sales. And you talked about the standard sales getting pushed into this quarter. I'm just wondering, do you see any potential risk for the COD sales getting pushed into Q1, getting pushed from Q4 to Q1?
Mr. Ke Chen: At this point, we are not. Go ahead.
Mr. Yumin Liu: Go ahead. The point here is as I mentioned earlier, other than several proximately in Europe, are doing the COD sale in the rest of the half a year of 2021, we expect more sales will be at NPP. Definitely purchase sales closing is lumpier and also sometimes unpredictable. They may get delayed from quarter to quarter, even going into next year. But by this time, we have the confidence to close those projects sales as they are until planned. But --
Philip Shen: Yeah.
Mr. Yumin Liu: -- To answer your question again, in Q4, our planned product sales are also NTP sales.
Philip Shen: Okay. So, it's being driven by a higher volume of NTP sales is giving you that more significant revenue number.
Mr. Yumin Liu: Exactly. That's
Philip Shen: Oh, that's fantastic. Okay. And then just last question and then I'll pass it on. Talking about the infrastructure bill in the U.S., and I know you guys really have kind of a niche in terms of the size projects and everything that you go after, in some case if you could talk about the U.S. infrastructure bill or talks about a reconciliation bill and potentially policies in other countries. Is there anything in them that you've seen or have you gone through those to see if they really hit your sweet spot in terms of megawatts? Like maybe communities’ sol -- may be provisions targeted towards -- targeted to community solar or something similar to that?
Mr. Yumin Liu: You know what, let me address one key point before I turn this one, as you talk about U.S. I turn to John unless to address some details. We are developing activities in Europe and the U.S. and possibly including China in about 9 to 10 different countries. It's very dynamic and also very different markets as we see. The margins or the market potential, in general, have been great to us. We see very supportive government policies across the board, in the U.S., in China, in every country in Europe. Okay. From that point of view, no matter you do small deals or big deals, it’s being great. But definitely, the margin level will vary or will be very different. Vis -a - visa, we are taking different development models in different countries. For example, in some countries including Europe, some European countries, and the U.S. we are developing Greenfield. And Greenfield projects normally are giving us a little bit higher margin. And also, we are in many other markets. We also do acquisitions of early-stage or middle-stage projects. And, from that point, the margin can be shared with us by the original project developers. But in the general case, that's the beauty of the operation of this Company. That is, we have experience in developing smaller deals like BG, commercial rooftops, and community solar in those territories.
Philip Shen: But also, we are going for bigger projects, including those 20, 30, 50 megawatts all the way to 100 plus megawatts. So, we do know how to do the best cost control to improve the margin level. So, in any case that we see the profit from those -- from all sizes of the transactions and the -- in also in, different territories, the margin can be all very attractive and healthy. John, could you cover some details in the U.S.
Mr. Yumin Liu: Sure. I mean I understood the question to be mostly, you know, basically, how would the infrastructure bill process affect us. I think on the community side, it's fundamentally a local -- basically, a local business, meaning politically, local PUCs, local jurisdictions. But that said, anything that starts to -- well, the obvious answer is anything that's federal like federal ITC, or if there were rule changes at FERC with how interconnection was viewed, if there was some cost-sharing or something like that, we'd be highly supportive of. But on the community solar side, it's actually more local and state-wide State governments basically that seem to influence other state governments because they see a successful program and then copy it. And then clearly, anything on the ITC front would help. But fundamentally, I think the demand for solar, survived the previous political environment. It -- it will, survive and thrive probably irrespective of the infrastructure bill, I don't want to say that we're indifferent. But there's pulled for solar and we're in the solar business. So, I think it's -- I could think of things that could help us nationally. But they are more related to interconnection FERC rules, maybe for bigger utility projects. And then maybe tax incentives. And then we'd have to get more specific state-by-state on the community side.
Philip Shen: Okay. Great. Thank you, guys. Well, again, congratulations on the profitable quarter and I'll jump back into you.
Mr. Yumin Liu: Thank you.
Mr. Ke Chen: Thank you.
Operator: Our next question comes from Marisa Hernandez at Sidoti & Co. Please go ahead.
Marisa Hernandez: Hi. Good afternoon. And congratulations from the quarter.
Mr. Yumin Liu: Thank you, Marisa.
Marisa Hernandez: A couple of questions. First off, on your China business. Can you give us an update on when do you expect the first revenue from those 100 megawatts that you're building? I believe you said last quarter, that we could start seeing something in the third quarter.
Mr. Yumin Liu: As I mentioned earlier, that we are very disciplined in the development of new projects in China as we focus on the high quality and profitable market or profitable projects. We revised our general China target from completing 100 megawatts within this year to building 100-250 megawatts by end of next year. We do have over 10 megawatts under construction and we have completed already several megawatts and target to furnish in on the China construction time frame using around 1 month to 6 weeks for those small rooftop projects. We expect around 10-15 megawatts will contribute to the Q4 power generation -- to Q4 top-line and bottom-line revenue from the power generation. And more installations will be completed in Q4 in the next four months contributing to next year. So, I would say, for the overall contribution of both revenue and profit for this year will be a little bit less. Thoughtfully, it may be 10, 15, or maybe below 20 megawatts.
Marisa Hernandez: So, you mean, just to make sure I understand what you're saying about your disciplined approach there. So, 100 to 150 megawatts, so you're pushing that target up, but you were doing it over a longer timeframe, meaning that would be the target by the end of '22?
Mr. Yumin Liu: Yes. It is the case.
Marisa Hernandez: Okay.
Mr. Yumin Liu: Yeah, there is one condition for that --
Marisa Hernandez: Sorry.
Mr. Yumin Liu: Go ahead.
Marisa Hernandez: Sorry. I didn't mean to interrupt. There's a little bit of a delay. So, what does it mean in terms of how you're thinking about what percent of your overall business, the IPP business, and specifically the IPP business would be? As of right now, the way I thought about it, it was about 20% of revenues give or take, but will that change?
Mr. Yumin Liu: It will remain to be the same or similar. At least for 2021.
Marisa Hernandez: Well, I mean, with the addition of 100 to 150 megawatts in 22 would it still be around those metrics with the growth in credit development in 22 or do you anticipate a significant deviation?
Mr. Yumin Liu: Percentage wide, I think it will be very similar as the growth the real gross of our development pipeline is in U.S. and Europe. While building up or installing all those so-called IPP assets in China that will take time while we have less than 100 megawatts projects in our hands goes through all different level permits or approvals, and start -- put them into construction in the next four months, or even going into next year. But the -- while the China IPP portfolio grows in the next, let's say, 18 months or so. The development pipeline asset with China will also grow rapidly. So, percentage-wide will be very similar, as I see.
Marisa Hernandez: Okay. Thank you. And then on the project development side, a couple of questions here. One, to follow up on the supply chain question that Pavel was asking. So, you're also seeing an improvement on the costs side, it sounds like. Have you observed any push outs or delays in your project development business into 2022 due to supply chain issues or you didn't suffer that?
Mr. Yumin Liu: In general, such a delay or impact has very minimum impacts on us, or at least not on our current plan or product sales. As the majority of our projects will be on the NTP sales. And as long as we complete our approval of the development process, our permitting process of the projects, and turn the product into the NTP ready stage, the buyers are eager to take them -- to take the title and buy from us. That means the COVID-challenged environment may potentially cause delays, as we mentioned earlier about the closing of the Spain project sale. That one was originally planned for last year's closing, but then to the Q2 closing. And now, we are expecting to close it in Q3. So that is one typical case that the COVID environment can still cause delay even we are at the NTP sales scenario.
Marisa Hernandez: Got it. Okay. That's great. Thank you.
Mr. Yumin Liu: One last thing is, at this time, we don't expect that many delays for our plan.
Marisa Hernandez: That's great. Then on the project development side, I think in the first half of the year, I have you have sold 66 megawatts, give or take. Wondering if you can provide an update on what could be the range of the number of megawatts sold for project developments for the full-year 2021, I believe in the past, you've mentioned 250 to 300 megawatts and that's looking a little bit of stretch on the first-half numbers.
Mr. Yumin Liu: Yeah. We are looking at 200-300 megawatts sales, product sales within this year. Our team's deal is working hard and working on closing these major project sales in both U.S. and Europe, and we have 4 months to go. I hope we can get to that target.
Marisa Hernandez: They did more than 150 megawatts, that we're talking about just to make sure we're talking about the same thing on the project development side on the second half of the year.
Mr. Yumin Liu: The total sales, as we discussed for the whole of 2021, should be over 200 megawatts at the minimum.
Marisa Hernandez: Project development only, corrects?
Mr. Yumin Liu: That's right. Not including the light IPP assets we are building in China.
Marisa Hernandez: Okay, that's great. Thank you so much for taking my questions.
Mr. Yumin Liu: Thank you very much, Merisa.
Operator: We have a follow-up question from the line of Philip Shen at ROTH Capital Partners. Please go ahead.
Philip Shen: Hi, guys. It's Donovan, again. on for Phil. I thought I'd take the opportunity to ask you guys about the storage side of the business and kind of what trends and what opportunities you are seeing there. There's development. Are there added challenges in doing NTP sales when you're including storage and just any updates or trend, maybe what's happening in different geographies? It will be great to hear your thoughts on that.
Mr. Yumin Liu: Okay. I'll cover the first couple of points and John can take over from the U.S. perspective. We are doing the solar-plus-storage, which is about maybe less than 12 months ago. And we have prox -- solar-plus-storage projects in both U.S. and Europe. And the countries in Europe, for example, in the UK, we do have projects for -- planned already for solar-plus-storage. And also, a couple of other countries too in Europe. And the -- in the U.S. as the -- if you follow our number, we signed one small-scale solar-plus-storage PPA, in California and
Philip Shen: Last year. And we are also in negotiation, in the final stage for a couple of other solar-plus PPAs. But the NTP sale can happen for solar-plus large deals. We don't see any challenges in this scenario as solar-plus-storage becomes normal due to the normal practice for any developer or any owner of the solar fits (ph). John, could you take over?
John: Yeah, I'm not sure I will add anything other than echo that storage as part of our everyday life here, it's part of RFPs that we are part of. We, oftentimes, we'll -- even in the solicitations, we will respond to both solar and solar-plus-storage RFP s that are part of the same RFP, meaning that they -- it's literally a checkbox where you can include storage in your bid and price your deal a certain way, or you can exclude storage and price your deal. And neither is handicapped. It's really a matter of the primary energy is the attribute that the RFP solicitor is usually looking for. But then storage as a component of time, which might or might not be valuable at that particular location or for that particular RFP solicitation. But it's part of everyday life. It's a ditch thing. I wouldn't necessarily say it's -- that it's growing, although it is true that it's -- I don't want to say anything too surprising, but it's just part of the normal way of doing things and we see some RFPs with storage, some without. I would say that talking about supply chain stuff, it's probably true that it's going to be hard to buy a battery in the next couple of quarters or more, because a lot of those are already spaced in and there probably are some -- you know, that supply is spoken for. But that's not news to anybody on the phone, necessarily. So, I don't have anything else to add, but we can talk specifics if there's interest.
Mr. Yumin Liu: Okay, thank you.
Operator: Our final question comes from Eric Filler at Hilltop Par. Please go ahead.
Pavel Molchanov: Hi, guys. Just a quick question. Could you talk about prices you're realizing on the business you're doing now?
Mr. Yumin Liu: I'm sorry, I did not really pick up your question.
Pavel Molchanov: Yeah, maybe I'm not phrasing what I'm trying to ask. Well, what kind of demand are you seeing in terms of just the projects that you're working on and getting bids on. What are you seeing? How strong is the pricing?
Mr. Yumin Liu: Oh, okay. Joe, I think you can pick this up.
John: I think the quick answer depends on which bids you're talking about. We are receiving strong bids for the projects that we have for sale. On the other side of the equation, we are seeing, if anything, some more robust pricing for the solar projects themselves in terms of the energy that we're able to charge at the project level. So, another way to say that is we're seeing a little bit of upward movement in PPA prices and rebate rates and community solar, there's actually some upward pressure which you could equate to a lot of things. But let's just call it -- there is some inflationary pressure on energy prices that we see, but we benefit from that. And there could be a number of drivers of that, supply and demand, it could be.
Pavel Molchanov: Right. Okay. Great. Thanks.
Mr. Yumin Liu: Thanks, Eric.
Operator: Thank you. There are no further questions so I'll head back to Yumin for closing comments. Thank you.
Mr. Yumin Liu: Okay. Thank you, Operator. To conclude, we are committed to growing profitability, managing our operations efficiently, and strengthening our financial position. We are energized by the opportunities in front of us and are looking forward to updating you on our progress again, a few months. Thank you all again for your participation. This concludes our call today. You may all disconnect.
