Edited Transcript of SOL earnings conference call or presentation 19-Nov-18 1:00pm GMT

Equally important is that our Q3 operating KPIs were as solid as our financial results. As you know, there are 2 elements to our business, the projects we developed and sell and the projects we own and operate. Our focus is development, due to the lower capital requirements, so we are evolving to an eventual or development model. However, by pursuing both models now, we reduce our risk and better utilize the capital we have. The Development business recycles capital quickly via operating assets generated stable high margin recurring revenue. Let me take a quick look at each.

The Development pipeline is strong at around 1.5 gigawatts, of which 783 megawatts are late-stage. This late-stage features 783.3 megawatts in the U.S., Canada, Poland, France, Hungary, Spain, India, South Korea and China. Approximately 132 megawatts of late stage is under construction, while 6.2 megawatts was connected in Q3. The connected projects were all China rooftop DG. Also we sold 13.9 megawatts of community solar projects in the U.S. state of Minnesota to Nautilus Solar Energy. As many of you know, Nautilus is a leading U.S. company that does solar project acquisition, development and asset management.

Our owned and operated portfolio throws off high-margin recurring revenue. It totals 231.7 megawatts. Of that, we operate 212 megawatts of rooftop projects in China, 15 megawatts in Romania and 4 megawatts of rooftop projects in U.K. Looking ahead, we have nearly 17 megawatts of rooftop projects under construction in China. Slide 3 provides our projects business in more detail.

Now let us cover some details under various regions. First, China, shown on Slide 6. We now operate approximately 212 megawatts of rooftop solar, concentrated in a few eastern provinces with favorable development environments. The commercial and industrial electricity prices in those provinces are relatively high and the electricity off-takers are generally creditworthy enterprises. Self-consumption DG projects in those provinces are attractive investments. In order to evolve the company into an asset-light solar project developer, we expect eventually to monetize our China DG assets. This will further strengthen our balance sheet, reduce leverage and improve cash flow.

We will remain highly focused on China due to the attractiveness of unsubsidized grid-parity projects that are free of regulatory risk and a subsidy delay. In addition to DG projects, we intend to develop and monetize [600] megawatts (corrected by company after the call) of ground-mounted on subsidized projects located in the Northern Provinces in 2019, as shown on Slide 6.

So the U.S. remains a large and important market for us, as highlighted on Slide 6 -- on Slide 7. Our late-stage projects, there are total 347 megawatts, of which approximately 124 megawatts are community solar in Minnesota and in New York. Additionally, we are pursuing small utility projects in Utah, Texas, Florida, Arizona, Colorado and California. During the quarter, we recognized revenue from the sale of 13.9 megawatts of community solar projects in Minnesota to Nautilus. These project set represented Nautilus' second acquisition of community solar assets developed by ReneSola. Similar to last year's first acquisition, this community solar portfolio is also qualified under Xcel Energy's rapidly expanding community solar program in Minnesota. Construction of the asset is expected to be completed in 2018 and come online during the first quarter of 2019. We look forward to working closely with Nautilus on future projects.

In Canada, shown on Slide 8, we have 7.6 megawatts of late-stage projects, all of which are under construction and shall connect to the grid by the end of 2018. These projects are eligible for the FiT3 scheme.

We show Poland on Slide 9. We have total projects there of 55 megawatts, of which 41 megawatts are under construction and 14 megawatts are operating. We plan for the 41 to come online gradually through our fourth quarter and first quarter of 2019. These are all part of the projects awarded to us in the government auction last year. Importantly, in September, we entered into a letter of intent to sell all 55 megawatts of projects in Poland to Chroma Impact Investment. Chroma is a global investor in renewable energy. They focus on large-scale solar, B2B and storage projects. Our Polish portfolio consist of 55 installations of 1 megawatt each. All of the projects will sell power under Poland's Contract for Difference regime and are eligible for 15 years guaranteed tariff. Poland is a key market for us and we are one of the largest project developers in the region. We believe this is a positive development, as the LOI validates our ability to develop and monetize solar projects across different geographies.

Slide 9 -- Slide 10 shows Hungary, where we continue to invest in small-scale DG projects. Our late-stage pipeline has more than 70 micro projects, each with a size of 0.5 megawatts, bringing total capacity to approximately 43 megawatts. All of these micro projects are under construction and should connect to the grid throughout the fourth quarter and the first quarter of 2019.

We show India on Slide 11. We are making meaningful progress in India, with a project pipeline of 236 megawatts. Most projects there are ground-mounted open access projects, similar to U.S. community solar. Indian projects can sell electricity to different commercial and industrial off-takers under long-term PPAs. Our strategy in India is a pure project developer model. We want to develop projects to the shovel-ready stage and then sell the project rights to investors. This model allows us to leverage our expertise in project development and our global network of solar project investors.

Now turning to Slide 12 where we cover other regions. In France. In the third quarter, we recognized revenue from the sale of 6.7 megawatts of projects. This came out of the strategic partnership with Green City Energy that we announced earlier this year. The deal calls for the joint development of 4 solar parks in the south of France. We expect COD for the parks in 2019. With a total installed capacity over 69 megawatts, the 4 parks will generate approximately 105 million kilowatt hours of electricity per year. Additionally, in the last tender, we won projects with a combined capacity of 2.5 megawatt. We -- our total projects pipeline in France is now 71.5 megawatts.

Beyond those geographies I just discussed, we are actively pursuing opportunities in other international markets, including Spain, South Korea and Vietnam. In Spain, we have a late-stage pipeline of 12 megawatts of private PPA project. And in South Korea, we secured a 9 megawatts ground-mounted project. In sum, we have a geographically diversified project portfolio, and I am optimistic about opportunity ahead of us.

Before I turn the call over to Xiaoliang, I would like to take a minute to reiterate our business model and strategy. We continue to execute a global asset-light project development model with a focus on distributed generation and community solar. Either we sell shovel-ready projects right, or sell build-and-transfer projects after grid connection. We typically achieved high gross margins from monetizing project rights. Downstream projects represented a large opportunity globally for us, and we're excited about our business prospects. Our talented team, diversified geography coverage and record of accomplishments put us in a prime position to grow profitably.

With that, let me now turn the call over to Xiaoliang for comments on our financial performance. Xiaoliang?

--------------------------------------------------------------------------------

Xiaoliang Liang, ReneSola Ltd - CFO [4]

--------------------------------------------------------------------------------

Okay. Thank you, Mr. Li and Johnny. And thank you, everyone, for joining us on the call today. I will review our financial performance for the third quarter of 2018 and then discuss our outlook.

Please turn to Slide 14. For third quarter, revenue was USD 18.8 million compared to USD 27.8 million last quarter and $36.3 million in the same period last year.

Here is our revenue breakdown by segment in Q3. Project Development was $5.5 million, as we recognized the revenue from the sale of 13.9 megawatts of utility projects in Minnesota and 6.7 megawatts of projects in France. EPC revenue was USD 3.3 million, mostly from EPC services for 3.7 megawatts of DG in China. Electricity sales were USD 10 million, mainly from 66.1 million kilowatt hour of electricity generated by the company's operating DG projects in China.

Gross profit was USD 8.6 million compared to a gross profit of USD 8.2 million last quarter and $6.4 million in the same quarter last year.

Gross margin was nearly 46%, well ahead of our expectations of 35% to 40% and up from 29.5% last quarter.