Warning statement regarding forward-looking statements

This quarterly report on Form 10-Q contains forward-looking statements within the meaning of the revised Securities Exchange Act of 1934 ("Exchange Act") and the revised Securities Act of 1933 ("Securities Act"), which are subject to unpredictable risks, The impact of uncertainty and assumptions. All statements in this quarterly report on Form 10-Q, except for statements of historical facts, are forward-looking statements. These forward-looking statements are made in accordance with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements about the following: the duration and severity of the current COVID-19 (new coronavirus) outbreak, including its demand for our business, manufacturing, project development, construction, O&M, financing, and our global supply The impact of the chain, the actions that government authorities may take to contain the COVID-19 outbreak or deal with its impact, and the ability of our customers, suppliers, equipment suppliers and other counterparties to fulfill their contractual obligations to us; certain modules The impact of manufacturing changes; our business strategy, including the expected trend and development of our business and the market in which we operate, and management plans; future financial performance, operating performance, revenue, gross profit margin, operating expenses, products, estimated costs ( Including estimated future module collection and recycling costs), warranty, solar module technology and cost reduction roadmap, currently we expect the delay in implementing the CuRe plan, and the associated estimated impact, restructuring, product reliability, investment and capital expenditure; we continue to reduce The cost-per-watt capacity of solar modules; the impact of public policies, such as tariffs or other trade remedies imposed on solar cells and modules; the potential impact of proposed legislation to encourage investment in renewable energy through tax credits; pending litigation Our ability to expand manufacturing capacity globally; our ability to reduce the cost of developing and building photovoltaic solar power systems; The COVID-19 pandemic has further exacerbated the impact of supply chain disruption, which may affect the raw materials used in our manufacturing process Procurement and distribution of our modules; research and development ("R&D") plans and our ability to increase the wattage of solar modules; sales and marketing plans; and competition. In some cases, you can identify these statements through forward-looking words, such as "estimates", "expects", "anticipates", "projects", "plans", "intends", "seeks", "believes", " "Forecast", "Foresee", "May", "May", "Should", "Target", "Target", "May", "Will", "May", "Forecast", "Continue", "Maybe" "" And the negative or plural of these words, and other similar terms. Forward-looking statements are only predictions based on our current expectations and our predictions of future events. All forward-looking statements contained in this quarterly report on Form 10-Q are based on information available to us as of the date of submission of this quarterly report on Form 10-Q, and therefore will only be published on the date of submission. You should not place undue reliance on these forward-looking statements. We assume no obligation to update any of these forward-looking statements for any reason, whether due to new information, future developments or other reasons. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, activity levels, performance or achievements to differ materially from those expressed or implied by these statements. These factors include, but are not limited to, the severity and duration of the COVID-19 pandemic, including its potential impact on the company's business, financial condition and operating performance; the structural imbalance of global photovoltaic solar module supply and demand; the renewable energy market, including solar; Our competitive position and other key competitive factors; reduction, cancellation or expiration of government subsidies, policies and support plans for solar projects; the impact of public policies, such as tariffs on solar cells and modules or other trade remedies; The passage of the proposed legislation to encourage investment in renewable energy through tax credits; our ability to execute long-term strategic plans; our ability to implement solar module technology and cost reduction roadmaps; our ability to increase solar module wattage; interest rate fluctuations and our The ability of our customers to obtain financing; the reputation of our offtake counterparty and the ability of our offtake counterparty to fulfill its contractual obligations to us; the loss of any of our major customers or our customers and counterparties based on their Our ability to perform contracts signed; to meet the prerequisites in our sales agreements; our ability to attract new customers and develop and maintain existing customers and suppliers 38 --------------- ------------------- ------------------------------- --------------- Catalog relationship; our ability to successfully develop and complete system business projects; our ability to transform existing production facilities to support new product lines; general economic and commercial conditions, including Conditions affected by U.S., international, and geopolitical events; environmental responsibilities, including CdTe and other semiconductor materials; claims under our limited warranty obligations; changes or failure to comply with government regulations and environmental, health and safety requirements; pending The impact of litigation; future collection and recycling costs of solar modules covered by our module collection and recycling program; supply chain disruptions, including container availability, port congestion, transportation cancelled by logistics providers, and fuel costs, all of which may be due to Intensified by the COVID-19 pandemic; our ability to protect intellectual property rights; our ability to prevent and/or minimize the impact of cyber attacks or other violations of our information systems; our continuous investment in research and development; the supply of components and raw materials and Prices, including cadmium telluride; our ability to attract and retain key executives and employees; and the matters discussed in item 1A. Our “risk factors” in our annual report on Form 10-K for the year ended December 31, 2020, other parts of this quarterly report on Form 10-Q, and other reports we file with the SEC. You should carefully consider the risks and uncertainties described in these reports. The following discussion and analysis of our financial status and operating results should be read in conjunction with our condensed consolidated financial statements and related notes, which are included in Form 10-Q in this quarterly report. When referring to our manufacturing capacity, total sales, and solar module sales, unless otherwise specified, the unit of watt power in megawatts ("MW") and gigawatts ("GW") is direct current ("DC" or " DC"). When referring to our projects or systems, unless otherwise stated, the unit of power for MW and GW is alternating current ("AC" or "AC").

We are a leading solar technology company in the United States and a global supplier of photovoltaic solar solutions. We develop, manufacture and sell photovoltaic solar modules using advanced thin-film semiconductor technology in R&D laboratories in California and Ohio, providing high-performance, low-carbon alternatives to traditional crystalline silicon photovoltaic solar modules. From the procurement of raw materials to the recycling of obsolete modules, we are committed to reducing the environmental impact and improving the social and economic benefits of our products throughout the life cycle. In some markets, we also develop and sell photovoltaic solar power generation systems using our manufactured modules, and provide operation and maintenance services to system owners. We are the world's largest thin-film photovoltaic module manufacturer and the largest photovoltaic module manufacturer in the Western Hemisphere.

Some of our financial performance and other major operational developments for the three months ended September 30, 2021 include the following:

• Net sales for the three months ended September 30, 2021 fell 37% to US$583.5 million, compared to US$927.6 million in the same period in 2020. The main reason for the decrease was that the sales of Ishikawa, Miyagi, Anamizu, Tungabhadra and Anantapur items in the previous period were partially offset by the increase in the number of modules sold to third parties. • Gross profit for the three months ended September 30, 2021 decreased by 10.2 percentage points to 21.4% from 31.6% in the same period in 2020. The decrease in gross profit was mainly due to the number of higher gross profit items sold in the previous period, due to the low estimated by-product credit of certain semiconductor materials recovered in the recycling process, the decrease in the average selling price per watt of our modules, the increase in logistics costs, and the increase in our modules The increase in collection and recycling responsibilities was partially offset. Due to the lower-than-expected claims for our old series of module technologies and the continuous changes in our latest series of module technologies, we continued to reduce module costs and benefited from the reduction in product warranty responsibilities during the current period. High yield. 39 ------------------------------------------------- ------------------------------- Contents•As of September 30, 2021, we have installed all of our 7.9 GWDC series The facility has a production capacity of 6 nameplates. In the three months ending September 30, 2021, we have produced 2.0 GWDC of solar modules, which means that the production of Series 6 modules has increased by 33% over the same period in 2020. The increase in Series 6 production was mainly due to the increase in Series 6 production, which increased production capacity in Malaysia in early 2021 and increased the throughput of our manufacturing facilities. We expect to produce series 6 modules ranging from 7.6 GWDC to 7.8 GWDC during 2021. Market overview The solar industry continues to be characterized by fierce price competition at the module and system level. Although the average selling price of modules in many global markets has fallen in the past few years, the recent module spot prices have risen due to rising commodity and freight costs. For example, due to the shortage of coal in China, energy prices have risen, and the Chinese government's mandatory power cuts have reduced the production of metal silicon. Polysilicon prices have risen sharply in recent months. Given that most of the world's polysilicon production capacity is located in China, rising energy prices and declining production capacity have further exacerbated the imbalance between supply and demand in the polysilicon market, leading to an increase in polysilicon prices. Although the duration of the spot price increase is uncertain, the average selling price of modules in the global market is expected to continue to decline in the long term. In general, we believe that solar cell and module manufacturers, especially Chinese solar cell and module manufacturers, have considerable installed production capacity and the ability to expand additional production capacity relative to global demand. Therefore, we believe that the solar energy industry may experience a period of structural imbalance between supply and demand (that is, a period when production capacity exceeds global demand), and this period will also put pressure on pricing. In addition, fierce competition at the system level may cause prices to drop rapidly, which may increase the demand for solar solutions, but will limit the ability of project developers and diversified module manufacturers to maintain meaningful and sustained profitability. In view of such market realities, we will continue to focus on our strategy and differentiation, including our advanced module technology, our manufacturing process, our diversification capabilities, our financial feasibility, and the availability of our modules and systems. Sustainable advantage. The global solar market continues to expand and develop, partly due to demand elasticity due to lower average selling prices at the module and system level, which has promoted the widespread adoption of solar energy. Due to these market opportunities, we recently announced plans to expand our manufacturing capacity by 6.6 GWDC by building our third US manufacturing facility in Laketown, Ohio, and our first manufacturing facility in India. These new facilities are expected to start operations in the first half of 2023 and the second half of 2023, respectively. In addition, we are developing solar projects in Japan because we are implementing utility-scale project pipelines. For more information about the projects we are developing, please refer to the table under "Management's Discussion and Analysis of Financial Status and Operational Results-System Project Pipeline". Although we expect that part of the future consolidated net sales, operating income, and cash flow will come from such projects, as we expand our manufacturing capabilities, we expect that third-party module sales will continue to have a more significant impact on our operating results and take advantage of The advantages of our modular technology. Relative to the cost of traditional forms of energy generation, the competitive pricing of modules and systems is expected to contribute to the diversification of global power generation and further demand for solar energy. However, as time goes by, the decrease in average selling price may have an adverse effect on our operating performance, because we have not yet signed a future module or system sales contract. If a competitor reduces its pricing to a level below its cost, significantly reduces the price for a module sales agreement or PPA, or is able to operate with the lowest or negative operating profit margin for a sustained period of time, our operating results may also be adversely affected. Influence. For some of our competitors, including many competitors in China, these practices may be achieved through their direct or indirect access to sovereign capital or other forms of state-owned support. In some markets in California and elsewhere, oversupply imbalances at the grid level may reduce short- and medium-term demand for new solar installations. Compared with previous years, PPA pricing has been reduced, and module and system sales margins have been reduced to 40%. - ------------------------------------------------ - ---------------------------- Catalog market. However, we believe that the impact of this imbalance can be mitigated by modern solar power plants and energy storage solutions that provide flexible operating configurations, thereby improving grid stability and increasing solar penetration. We continue to address these uncertainties, in part by implementing our module technology improvements, working with grid operators and utility companies, and implementing certain other cost reduction initiatives. We face fierce competition from crystalline silicon solar module manufacturers and solar project developers. Solar module manufacturers compete with each other on price and multiple module value attributes, including wattage (through larger form factors or improved conversion efficiency), energy yield, degradation, sustainability, and reliability. Competition on various factors, such as net present value, return on equity, and levelized cost of electricity ("LCOE"), which means the net present value of the total life cycle cost of the system divided by the amount of energy expected to be produced during the operating life of the system. Most crystalline silicon cell and wafer manufacturers have transitioned from low-efficiency back-field polycrystalline cells (the traditional technology we usually compete with) to the more efficient passivated emitter rear contact with a competitive cost structure ( "PERC") monocrystalline cells. In addition, although traditional solar modules, including the solar modules we currently produce, are single-sided, which means that their ability to generate energy is a function of the direct and diffuse irradiance of the front Some single-crystal PERC module manufacturers provide double-sided modules that also capture the diffuse irradiance on the back of the module. Double-sidedness will affect the efficiency of the nameplate, but by converting the irradiance of the front and back, this technology can improve the overall energy production of the module relative to the efficiency of the nameplate when applied to certain applications. Taking into account the incremental BoS and other costs, This may reduce the overall LCOE of the system compared to systems that use traditional solar modules (including the ones we currently produce). According to public information, we believe that we are one of the lowest cost module manufacturers in the solar industry, calculated at the cost of modules per watt. This cost competitiveness allows us to compete favorably in a market where module and system prices are extremely competitive. Our cost competitiveness depends to a large extent on our advanced thin-film semiconductor technology, module wattage (or conversion efficiency), proprietary manufacturing process (this allows us to use continuous and highly automated industrial manufacturing to produce within hours Out of the CdTe module process, not batch processing), and our focus on operational excellence. In addition, the amount of semiconductor materials used in our CdTe modules is about 1-2% of that used to manufacture traditional crystalline silicon solar modules. The cost of polycrystalline silicon is an important driving factor for the manufacturing cost of crystalline silicon solar modules, and the time and rate of change of the cost of silicon raw materials and polycrystalline silicon may lead to changes in the pricing level of solar modules. In recent years, various measures (such as the use of diamond wire saw technology) have reduced the polysilicon consumption of each cell, which has led to a decline in our relative manufacturing cost competitiveness compared to traditional crystalline silicon module manufacturers. In terms of performance, our CdTe solar modules have certain energy production advantages over competing crystalline silicon solar modules under many climatic conditions. For example, our CdTe solar technology provides: • Excellent temperature coefficient, which leads to stronger system performance in typical high sunshine climates, because on average, when the module temperature is much higher than 25°C (standard test) Condition); • In a humid environment, relative to standard test conditions, atmospheric moisture will change the solar spectrum, with excellent spectral response; • Better partial shading response than competitive crystalline silicon technology, when partial shading occurs, crystalline silicon The power generation capacity of the technology may be much lower than that of the CdTe solar module; • Immune to battery rupture and the loss of power output caused by it, which is a common failure caused by poor manufacturing, handling, weather or other conditions in crystalline silicon modules . 41 ------------------------------------------------- ------------------------------- In addition to these technical advantages, we also guarantee that our photovoltaic solar modules will be in the first year At least 98% of the nominal power output rating is produced, and the warranty coverage is reduced by a degradation factor of 0.3% to 0.5%, depending on the module series, and thereafter, up to 30 years per year during the limited power output warranty period. According to the implementation of our Copper Replacement ("CuRe") program, which will replace copper with certain other elements that are expected to improve module performance, we expect the guaranteed degradation of CdTe solar modules to drop to 0.2% per semester in the near future. Due to these and other factors, our photovoltaic solar modules can generate more annual energy than traditional modules with the same nameplate capacity under actual operating conditions. Although our modules and systems are generally competitive in terms of cost, reliability and performance attributes, there is no guarantee that such competitiveness will continue to the same degree or exist in the future. Any decline in the competitiveness of our products may result in a further drop in the average selling price of our modules and systems, and further compression of profit margins. We continue to focus on improving the competitiveness of our solar modules and systems by accelerating the progress of our module technology and cost reduction roadmap.

We believe that our business, financial condition and operating results may be favorably or adversely affected by the following trends and uncertainties. See clause 1A. The "Risk Factors" in our annual report on Form 10-K for the year ended December 31, 2020 are used to discuss other risks that may affect us ("Risk Factors"). Our long-term strategic plan focuses on our goal of creating long-term shareholder value through the balance of growth, profitability and liquidity. In implementing such plans, we focus on providing utility-scale photovoltaic solar solutions in key geographic markets where we believe there is an urgent need for large-scale photovoltaic solar power, including the entire United States, Japan, Europe, India and certain other strategies market. In addition, we continue to pay attention to opportunities for our photovoltaic solar solutions to directly compete with traditional forms of power generation on the basis of LCOE or similar, or to supplement such power generation products. These opportunities include the use of utility-scale photovoltaic solar solutions to eliminate and replace aging fossil fuel-based power generation resources. For example, according to public information, the decommissioning of coal-fired power plants in the United States alone is expected to be close to 50 GWDC in the next ten years, which means a significant growth in the potential solar energy market. This focus on our core modules and utility-scale products exists in the current market environment, including rooftop and distributed solar, especially in the United States. Although it is not clear how rooftop and distributed solar will affect our core products in the next few years, we believe that utility-scale solar will continue to be an attractive product for companies with technology and cost leadership and will continue to occupy An increasing share of the total power generation mix. However, our module products in certain international markets may be partly driven by future demand for rooftop and distributed power generation solar solutions. The demand for our solar solutions depends in part on market factors beyond our control, such as the availability of debt and/or equity financing (including tax equity financing in the United States), interest rate fluctuations, domestic or international trade policies, and government support programs. Adverse changes in these factors may increase the cost of utility-scale systems, thereby reducing the demand for our solar solutions. Our ability to provide solar solutions on economically attractive terms is also affected by the availability and cost of logistics services related to the procurement of raw materials used in the manufacturing process and the distribution of modules. For example, due to the limited supply of shipping containers, labor shortages leading to increased port congestion, the increase in the cancellation of goods by logistics providers, and the increase in fuel costs, shipping costs in many parts of the world continue to increase. These factors may disrupt our supply chain and adversely affect our manufacturing business, because several of our key raw materials and components are either from a single source or purchased from a limited number of suppliers. In order to deal with these interruptions, we have met certain delayed shipment requirements in an effort to manage our shipment 42 ------------------------- --- ----------------------------------------------- --- - Catalog routes and reduce our impact on unsigned freight rates. In addition, due to ongoing schedule reliability issues for many operating ships, we are adjusting our shipping plans to include additional module delivery lead times and use our US distribution network to better meet our customer commitments. Although it is not clear how long these problems will last, the disruption of major air routes or other economic disruptions caused by the COVID-19 pandemic may further exacerbate these problems. In some markets, the demand for our utility-scale products may be affected by specific regulations or policies of government agencies or public utility regulators. For example, in June 2020, the Japanese legislature issued an amendment to the Japanese Ministry of Economy, Trade and Industry's power business enforcement order, which is expected to invalidate the project's feed-in tariff certificate. Failure to complete the construction plan acceptance, submit the interconnection application and/or realize commercial operation within the specified time after the date specified in the respective certificate. The amendment came into effect in April 2022 and applies to all projects, regardless of the type of power generation. It aims to release the grid capacity reserved for delayed projects so that other newly developed projects can use these to consumers at a lower power cost. capacity. The deadline for projects to complete construction plan acceptance, submit interconnection applications, and/or achieve commercial operations varies from project to project, but must not be earlier than March 2023. Any number of our various projects in Japan before the deadline of the expected construction plan acceptance and/or commercial operation date may adversely affect the value of these projects and our ability to obtain any related project financing. Many governments have also proposed policies or support plans aimed at encouraging investment in renewable energy. Such support programs may include additional incentives for renewable energy projects (including photovoltaic solar power generation systems) or manufacturers of renewable energy products over several years. For example, the US Congress recently introduced a piece of legislation aimed at increasing domestic solar manufacturing and accelerating the transition to clean energy by providing tax credits for US solar manufacturers and project developers. Among other things, such proposed legislation will extend the investment tax credit for solar projects that meet certain domestic content, labor, and wage requirements to 40% for a period of 10 years; introduce certain refundable components for solar modules manufactured in the United States Tax credits; restore certain tax credits for capital investment in solar module component manufacturing; expand the scope of production tax credits for energy storage projects. If such legislation is successfully signed into law, or other similar policies or support plans are promulgated, it may have a positive impact on our business, financial condition and operating performance. Although we compete in many markets that do not require specific government subsidies or support programs for solar energy, our net sales and profits will still vary depending on the availability and scale of government subsidies and economic incentives. We intend to concentrate our resources on those markets and energy applications where solar energy can be the lowest cost and most suitable energy solution, especially in the current or projected huge demand for electricity, relatively high existing electricity prices, and demand for renewable energy. Strong regions with energy production and high solar energy resources in the United States, Japan, Europe and India. Therefore, we closely evaluate and monitor the appropriate level of resources required to support such markets and their associated sales opportunities. We have and intend to continue to invest a lot of capital and human resources to reduce the total installation cost of photovoltaic solar energy and ensure that our solutions are well integrated into the overall power ecosystem of each specific market. Creating or maintaining a market position in certain strategic markets and energy applications also requires us to adapt to new and changing market conditions, including changes in the market for potential buyers of our modules and solar projects. A market environment with few potential project buyers and a high cost of capital usually puts downward pressure on the potential revenue of such products. Conversely, a market environment with many potential project buyers and a low cost of capital may impose downward pressure on such products. The potential income has a beneficial impact. Potential revenue from such products. For example, the emergence of utility-owned power generation has increased the number of potential project buyers because these utility customers can obtain potentially low capital costs through tariff-based utility investment. Given their long-term ownership, utility power customers often seek to cooperate with diversified and stable companies that can provide a wide range of utility-scale power generation solutions, including reliable photovoltaic solar technology, thereby reducing their long-term ownership risks. 43 ------------------------------------------------- ------------------------------- Contents We continue to invest a lot of financial resources in our research and development plan, including efforts to improve module performance, such as Our CuRe program. However, our CuRe program has encountered challenges in realizing its full performance rights under high-volume manufacturing conditions, coupled with travel restrictions, quarantine requirements, and government orders, affecting our ability to upgrade tools to support the CuRe program at our Malaysian manufacturing plant And Vietnam, causing delays in the implementation of our CuRe plan. Therefore, we are revising the expected integration timetable from the end of 2021 to the beginning of 2022 to achieve our lead line implementation. In response to these challenges, we have modified or will endeavor to modify certain customer contracts for modules that use CuRe technology, including replacing our other modules with modules with CuRe technology that are expected to be delivered in accordance with the terms of the original customer contract. As far as these customer contract amendments are concerned, we may make certain price concessions. Based on the information we currently have available, including our current assessment of the challenges of the CuRe program and the relative performance characteristics of the alternative modules we can provide to customers, we currently estimate that the price concessions we may make will not exceed the above-mentioned affected customer contracts. About 100 million U.S. dollars in revenue in 2022. See clause 1A. Table 10-Q "Risk Factors" in the Quarterly Report to learn more about the delay in our CuRe program. Sometimes, we may temporarily own and operate certain systems and intend to sell them in the future. As of September 30, 2021 and December 31, 2020, the recoverability of our Luz del Norte photovoltaic solar power plant is based in part on the possibility that we will continue to own and operate the system. However, due to our assessment of systematic strategic sales opportunities, our intention to hold assets may change in the short term. Seeking such opportunities requires coordination with the system’s lenders, which may lead to unrecoverable book value of the system based on probability-weighted undiscounted future cash flows, which in turn may lead to the system in future periods. Therefore, any changes in our intended use of the asset or its disposal may result in impairment charges, which may have a material impact on our condensed consolidated financial statements and have a material adverse effect on our operating results. We continuously evaluate forecasted global demand, competition and our target market, and seek to effectively balance manufacturing capabilities with market demand, as well as the nature and scope of our competition. We continue to increase the nameplate production capacity of existing manufacturing facilities by increasing production throughput, increasing module wattage (or conversion efficiency), and reducing manufacturing output losses. In addition, we recently announced plans to expand our manufacturing capacity by 6.6 GWDC by building our third US manufacturing plant in Laketown, Ohio, and our first manufacturing plant in India. Such additional capacity and any other potential investment to increase or otherwise modify our existing manufacturing capabilities to respond to market demand and competition may require a large amount of internal and possible external funding sources and may be subject to certain risks described in the risk And uncertainties. In response to the COVID-19 pandemic, government authorities have recommended or ordered the restriction or suspension of certain businesses or business activities in the jurisdictions where we conduct business or conduct business. Although some of these orders allow for the continuation of necessary business operations or allow for minimal business activities, these orders will be continuously revised or may be revoked or replaced, or our understanding of the applicability of these orders and exemptions may be in any time. In addition, due to the contraction of the virus, or fear of illness due to the virus, the availability of our operational labor force (such as our manufacturing staff) may be reduced. Therefore, we may be ordered by government authorities at any time, or we may decide based on our understanding of government authorities’ suggestions or orders or the availability of our personnel that we must reduce or stop business operations or activities. In short, including manufacturing, performance, and project development , Construction, operation or maintenance operations, R&D activities or the implementation of our technology roadmap (such as our CuRe plan). At present, the impact of such restrictions on our manufacturing facilities is minimal, except for the aforementioned delay in the implementation of the CuRe program, and we have implemented extensive security measures to ensure the continuity of our operations and business. Suppress the spread of COVID-19 in our manufacturing, administrative and other places and facilities, including those in 44------------------------ - ------------------------------------------------ - ---- Directory of the United States, Malaysia and Vietnam. Although we continue to cooperate with relevant government agencies in Malaysia and Vietnam to allow personnel supporting the implementation of our technology roadmap to make necessary travel, such implementation may be delayed if our CuRe plan is delayed due to travel restrictions, quarantine requirements, Other government orders or an increase in the COVID-19 infection rate.

The following table summarizes our approximately 386 MWAC advanced project pipeline as of November 4, 2021. The actual amount of modules installed in our project will be larger than the project scale in MWAC, because the amount of modules required for the project is based on MWDC. According to the DC-AC ratio, the MWAC scale is usually 1.1 to 1.6. Due to many factors, including PPA pricing and system Location, design and cost, the ratio varies from project to project. Once we have basically completed the construction of the project and after almost all related project income has been confirmed, the project will usually be deleted from our advanced project pipeline table below. If the project cannot be sold due to economic changes or other factors, or we decide to temporarily own and operate the project, the project or part of the project may also be deleted from the table below based on strategic opportunities or market factors. The following table includes projects that have confirmed offtake agreements or projects that have signed contracts with customers, subject to certain closing conditions: Estimated or actual percentage of completed projects MWAC Projects/locations in sales Project size

The agreement is mainly licensed to obtain PPA contracted partners

Year of Completion September 30, 2021 Luz del Norte, Chile 141 No Yes (1) 2016 100% Taomura, Japan 53 No Yes (2) 2023 20% Kyoto, Japan 38 No Yes Chubu Electric Power 2022 36% Company Yatsubo, Japan 26 No Yes (2) 2023 49% Ikeda 21, Japan No Yes (2) 2023 41% Japan (multiple locations) 107 No Yes (3) 2021/2023 38% Total 386 ----------

(1) The power plant capacity of approximately 70 MWAC is signed under various power purchase agreements; the remaining capacity will be sold on an unconsolidated basis.

(2) The project has obtained feed-in tariff rights, and the relevant power purchase agreement will be implemented later.

(3) 11 MWAC has signed a contract with Tokyo Electric Power Company. The remaining 96 MWACs have obtained feed-in tariff rights, and the relevant PPA for such projects will be implemented later.

45 ------------------------------------------------- ------------------------------- Directory operation result

The following table lists our condensed consolidated operating statements as a percentage of net sales for the three and nine months ended September 30, 2021 and September 30, 2020:

As of September 30, 2021, and the three months ending September 30, 2020, 2021, 2020 net sales 100.0% 100.0% 100.0% 100.0% Cost of sales 78.6% 68.4%% 76.4%% 2020% 2020% 2020 4%% 2.4%% 2020 total profit and administration 7.5% 5.4% 6.5% 7.6% R & D 4.4% 2.5% 3.4% 3.4% Production start 0.5% 1.4% 0.8% 1.1% Litigation loss-%-%-% Net Sales 0. (0.3)%-% 7.3%-% Operating income 8.7% 22.3% 20.5% 12.4% Foreign exchange net loss (0.2)% (0.2)% (0.2)% (0.2)% Interest income 0.3% 0.2% 0.2 % 0% Interest expense, net (0.5)% (1.2)% (0.5)% (1.0)% Other (expense) income, net (0.4)% (0.3)% 0.1% (0.4)% Income tax (expense) income ( 0.1)% (4.1)% (3.4)% 1.9% Net income 7.7% 16.7% 16.7% 13.4% Segment overview

Our business is divided into two parts. Our module division involves designing, manufacturing and selling CdTe solar modules to third parties. Our system division includes the development, construction contracting and management, operation, maintenance and sales of photovoltaic solar power generation systems, including those installed in such systems Any component. Systems and any revenue from the energy generated by such systems.

Net sales of the module business We generally sell our solar modules at a specific price per watt. During the three and nine months ending September 30, 2021, we sold most of our solar modules to system integrators and operators in the United States, and almost all of our module business net sales were denominated in U.S. dollars. We confirm module sales revenue at a certain point after the control of the module is transferred to the customer. This usually occurs at the time of shipment or delivery, depending on the terms of the relevant contract.

During the three-month and nine-month period ending September 30, 2021, most of our system business net sales were in the United States and Chile, and were denominated in U.S. dollars. We confirm sales development projects (excluding EPC services) or sales of complete systems when we sign relevant sales contracts with customers. For other sales of solar power systems and/or EPC services, we usually recognize revenue over a period of time because our performance creates or enhances energy production assets controlled by our customers. In addition, the sale of solar power systems combined with EPC services represents a single performance obligation for the development and construction of a single power generation asset. For this type of arrangement, we recognize revenue when we perform the work using the cost-based input method, so the revenue is 46 --------------------------- -------------------------------------------------- --- The catalogue confirms that the work is based on the relationship between the actual cost and the total estimated cost of the given contract.

The following table shows net sales by reportable segment for the three and nine months ended September 30, 2021 and September 30, 2020:

Three months ago, nine months, September 30, September 30 (in thousands of dollars) 2021 2020 three-month change 2021 2020 September change module $562,810 $422,000,480 $1 140,330 33% $ 1,640,436 $ 1,876,79 $45,257,57 38% System 20694 505085 (484391) (96)% 375,622 914,421 (538,799) (59)% Net Sales $ 583,504 $ 927,565 $ (344,061) (37)% $ 2,016,058 $ 2,102,1002 (8) Net sales of modules of $40,000 increased by $2,102,1002 million (8) The three months ended September 30, 2021, compared with the three months ended September 30, 2020, was mainly due to a 51% increase in watt sales, partially offset by a 12% decrease in average selling price per watt. Compared with the three months ended September 30, 2020, the net sales of our system division decreased by USD 484.4 million for the three months ended September 30, 2021. This was mainly due to the previous period Ishikawa, Miyagi , Anamizu, Tungabhadra and Anantapur projects. Compared with the nine months ended September 30, 2020, the net sales of our module division increased by US$452.8 million for the nine months ended September 30, 2021. This was mainly due to a 54% increase in watt sales, partially offset by a 10% reduction in wattage. The average selling price per watt. Compared with the nine months ended September 30, 2020, our system division’s net sales for the nine months ended September 30, 2021 decreased by US$538.8 million, mainly due to Ishikawa, American Kings, Miyagi , Anamizu, Tungabhadra and Anantapur projects in 2020, the GA Solar 4 project’s early stage and almost all construction activities have been completed, partially offset by the current sales of Sun Streams 2, Sun Streams 4 and Sun Streams 5 projects and the outstanding settlement. Compensation arrangements related to the sale of one of our projects. In accordance with the terms of the compensation arrangement, we received a portion of the settlement payment of USD 65.1 million, which we recorded as income for the nine months ended September 30, 2021. Please refer to Note 10. Our condensed consolidated financial statements "commitments and contingencies" discuss our compensation arrangements. The cost of sales of the module business The cost of sales of our module business includes the cost of raw materials and components used to manufacture solar modules, such as glass, transparent conductive coatings, CdTe and other thin-film semiconductors, laminates, connector components, edge sealing materials And frames. In addition, our cost of sales includes direct labor and manufacturing costs for manufacturing solar modules, such as engineering, equipment maintenance, quality and production control, and information technology. Our cost of sales also includes depreciation of manufacturing plants and equipment, facility-related expenses, environmental health and safety costs, and costs related to transportation, warranty, and solar module collection and recycling (excluding stacking).

The cost of sales of our system business includes project-related costs, such as development costs (legal, consulting, transmission upgrades, interconnection, licensing and other similar costs), EPC costs (mainly including solar modules, inverters, electrical and installation hardware, project Management and engineering, construction labor) and site-specific costs. 47 ------------------------------------------------- ------------------------------- Table of contents The table below shows the three-month and nine-month Cost of sales as of September 30, 2021 and 2020: Nine months ending September 30 and September 30 (in thousands of U.S. dollars) 2021 2020 three-month change 2021 2020 nine-month change module $444,550 $297,658 $297,658 $297,658 $297,658 $297,658 $2021, $1469, $146 $146 45% System 14,374 336,892 (322,518) (96)% 220,204 673,723 (453,519) (67)% Total cost of sales $ 458,924 $ 634,550 $ (175,59, 6) $% (175, 59, 6) 4, 5, 83 $ 3 78.6% 68.4% 76.0% 75.2% For the three months ended September 30, 2021, our cost of sales dropped by 175.6 million US dollars, which is a percentage of net sales compared to 9 This is an increase of 10.2 percentage points over the three months of January 30, 2020. The reason for the decrease in cost of sales was that the main cost of sales of our system department dropped by US$322.5 million, mainly due to the small number of projects sold during this period. The decrease in the cost of sales of the system segment was partially offset by an increase of US$146.9 million in the cost of sales of the module segment, mainly due to the following reasons: • The increase in module sales led to a cost increase of US$155.9 million; • Higher logistics costs were US$30.3 million; • Due to the lower-than-expected settlement of our old series of module technology and the modification of the expected settlement, we have reduced the product warranty liability of US$19.7 million in 2020, resulting in a lower expected return rate; • Due to capital, labor and maintenance Changes in the estimated timing of cost-related cash flow and updates to certain valuation assumptions have reduced our module collection and recovery liabilities by US$18.9 million in 2020; • Due to the estimated by-product credit of certain semiconductor materials recovered in the recycling process Lower and certain valuation assumption updates, our module collection and recovery liabilities have increased by US$10.8 million in 2021; • Module costs have continued to decrease, and sales costs have been reduced by US$46 million. • In 2021, our product warranty liability will be reduced by US$33.1 million, due to lower-than-expected claims for our old series of module technologies, and continuous changes in our latest series of module technologies, resulting in a reduction in our expected module return rate; • 2020 Some module manufacturing equipment (including frames and assembly tools) has an impairment loss of $17.4 million, and these equipment no longer meet our long-term module technology roadmap. Compared with the nine months ended September 30, 2020, for the nine months ended September 30, 2021, our cost of sales decreased by USD 48.7 million, which represented an increase of 0.8 percentage points as a percentage of net sales. Our system department’s cost of sales decreased by USD 453.5 million, which was mainly due to the decrease in the number of sales and projects under construction during the period. The decrease in the cost of sales of our system segment was partially offset by an increase of US$404.8 million in the cost of sales of the module segment, mainly due to the following reasons: • Increased module sales led to a cost increase of US$466.5 million; • Higher logistics costs were US$47.6 million • In 2020, our product warranty responsibility was reduced by US$19.7 million; • In 2020, our module collection and recycling responsibility was reduced by US$18.9 million; • In 2021, our module collection and recycling responsibility was increased by US$10.8 million; • Module costs continued to decrease, and the cost of sales was reduced by US$123.5 million, partially offsetting this. • In 2021, our product warranty liability was reduced by US$33.1 million; • The above-mentioned impairment loss in 2020 was US$17.4 million. 48 ------------------------------------------------- ------------------------------- Catalog gross profit may be affected by many factors, including the selling price of our modules and systems, Our manufacturing costs, project development costs, BoS costs, capacity utilization and downtime of our manufacturing facilities, and foreign exchange rates. Gross profit may also be affected by the net sales mix of our module and system business. The following table shows the gross profit for the three and nine months ending September 30, 2021 and 2020: The three months ending September 30 and September 30 (in thousands of U.S. dollars) 2021 2020 three-month change 2021 2020 nine-month change The profit for the three months ended September 30 decreased by 1 percentage point to 24.8 percentage points from 24.4 percentage points in the month of September, and increased from 31.6% in the three months ended September 30, 2020 to September 30, 2021, mainly due to Due to the increase in the number of projects with higher gross profit sold in the previous period, the average selling price per watt of our modules has decreased, and the logistics cost has increased. Compared with the above-mentioned decrease in the previous period, our module collection and recycling responsibilities have increased in this period. The higher benefits brought by the reduction in product warranty liability are offset, and module costs continue to be reduced. Gross profit decreased by 0.8 percentage point from 24.8% for the nine months ended September 30, 2020 to 24.0% for the nine months ended September 30, 2021. This was mainly due to the decrease in the average selling price per watt of our modules and sales volume. The increase in the gross profit items sold in the previous period and the increase in logistics costs were partially offset by the continuous reduction in module costs and the above compensation issues.

Sales, general and administrative expenses mainly include salary and other personnel related expenses, professional expenses, insurance expenses and other business development and sales expenses.

The following table shows the sales, general, and administrative expenses for the three months and nine months ended September 30, 2021 and September 30, 2020:

Nine months ending September 30 and September 30 (in thousands of U.S. dollars) 2021 2020 Three-month change 2021 2020 Nine-month change Sales, general and management $43,476 $49,861 $ (6,385) (13)% $ 131809 $9 28,309) (18)% as a percentage of net sales 7.5% 5.4% 6.5% 7.6% Sales, general and administrative expenses for the three months ended September 30, 2021 and the three months ended September 30, 2020 The decrease in comparison was mainly due to the decrease in the number of employees and the decrease in professional fees caused by employee compensation expenses, which were partly offset by the increase in asset impairment costs for certain projects.

Sales, general and administrative expenses for the nine months ended September 30, 2021 decreased compared to the nine months ended September 30, 2020, mainly due to reduced staff, reduced professional fees and expected credit losses The reduction has led to a reduction in employee compensation costs for our accounts receivable.

49 ------------------------------------------------- ------------------------------- Catalog R&D expenses mainly include wages and other personnel-related expenses; our R&D activities The cost of products, materials, and external services used in the R&D; depreciation and amortization expenses related to R&D of specific facilities and equipment. We improve our technology and processes through a number of programs and activities to improve the performance of solar modules and reduce their costs.

The following table shows the R&D expenses for the three and nine months ending September 30, 2021 and September 30, 2020:

Nine months ended September 30, September 30, (thousands of US dollars) 2021 2020 three-month change 2021 2020 nine-month change R&D $25,426 $22,972 $2,454 11% $69,204 $83% (713) as a percentage of net sales 4.4 % 2.5% 3.4% 3.4% R&D expenses for the three months ended September 30, 2021 increased compared with the three months ended September 30, 2020, mainly due to the increase in material and module testing costs, partly The lower cost offsets the staff salary expenses caused by the reduction of R&D personnel. The research and development expenses for the nine months ended September 30, 2021 were reduced compared to the nine months ended September 30, 2020. This was mainly due to the reduction in employee compensation expenses due to the reduction of R&D personnel and the unattributed due to confiscation. The share-based compensation costs are reduced. Our former CTO retired on March 15, 2021, and reduced the impairment costs of certain equipment, partially offset by the increase in material and module testing costs.

Production start-up costs include the operating-related costs of the production line before obtaining commercial production qualifications, including the raw material costs of solar modules running through the production line during the qualification phase, the employee compensation activities of individuals supporting the production start-up, and applicable facility-related expenses. Production start-up costs also include the costs associated with choosing a new location and the implementation costs of manufacturing process improvements (if we cannot capitalize these expenditures).

The following table shows the production start-up costs for the three and nine months ending September 30, 2021 and September 30, 2020:

Nine months ending September 30 and September 30 (in thousands of U.S. dollars) 2021 2020 three-month change 2021 2020 nine-month change production start $ 2,945 $ 13,019 $ (10,074) (77)% $ 16,014 $ 8 ) (33)%%% Net sales 0.5% 1.4% 0.8% 1.1% During the three-month period ending September 30, 2021, we incurred production start-up costs, which were mainly used for our factory in Kulim, Malaysia Some manufacturing upgrades. During the nine-month period ending September 30, 2021, we incurred production start-up costs, mainly for the transition to Series 6 module manufacturing at our second factory in Kulim, Malaysia, which started commercial production in early 2021 . During the three-month and nine-month period ending in 2021 on September 30, 2020, our second plant in Kulim, Malaysia transitioned to Series 6 module manufacturing and the capacity expansion of our manufacturing plant in Perrysburg, Ohio Incurred production start-up costs. 50 ------------------------------------------------- ------------------------------- Table of Contents Litigation Losses The table below shows the three and nine months of litigation as of September Losses for 30, 2021 and 2020: For the nine months ended September 30, (in thousands of U.S. dollars) 2021 2020 three-month change 2021 2020 nine-month change litigation loss $-$-$--% $-$ 6,000 $ (6,00) (100)%% Net sales-%-%-% 0.3% In July 2020, we executed the final agreement to resolve the opt-out presumed shareholders filed in the Arizona District Court in 2015 Opt out of separate class actions for claims in litigation. According to the settlement agreement, we agreed to pay a total of 19 million US dollars in exchange for mutual release and dismissal without affecting the opt-out action. The agreement does not contain any responsibility, wrongdoing or liability admitted by the defendant. On July 30, 2020, First Solar contributed capital and settled, and on July 31, 2020, the two parties jointly submitted the agreement to terminate the contract. On September 10, 2020, the Arizona District Court made an order to dismiss the case with prejudice. As of December 31, 2019, we have accumulated an estimated loss of USD 13 million for this operation. As a result of the settlement, we accumulatively increased litigation losses by US$6 million in the nine months ended September 30, 2020.

Net income from corporate sales

The following table shows the net income from corporate sales for the three and nine months ended September 30, 2021 and September 30, 2020:

Nine months ending September 30 and September 30 (in thousands of U.S. dollars) 2021 2020 Three-month change 2021 2020 Nine-month change Corporate sales net income $ (1,866) $-$ (1,866) (100) % $ 147,284 $-$ 147,284 100%% Net sales (0.3)%-% 7.3%-% In August 2020, we reached an agreement with Clairvest's subsidiary to sell our North American O&M business. On March 31, 2021, we completed the transaction. After some customary post-delivery adjustments, we received a total consideration of US$149.1 million. As a result of this transaction, we recognized $115.8 million in gains (net of transaction costs and post-transaction adjustments) for the nine months ending September 30, 2021. In January 2021, we signed with Leeward to sell our US project development business. On March 31, 2021, we completed the transaction with a total purchase price of US$284 million. The purchase price includes US$151.4 million for the sale of the U.S. project development business and US$132.6 million for the sale of 392 MWDC solar modules. These amounts are listed in the “net sales” of our condensed consolidated operating statement for the nine months ended September 30 2021. As a result of this transaction, we recognized a gain of US$31.5 million in the nine months ending September 30, 2021, after deducting transaction costs and post-transaction adjustments.

For more information on these transactions, please refer to Note 2. "Business Sales" to our condensed consolidated financial statements.

51 ------------------------------------------------- ------------------------------- List of foreign currency losses, net

Net foreign currency losses include the net impact of gains and losses arising from holding assets and liabilities and conducting transactions denominated in currencies other than the functional currency of the subsidiary.

The following table shows the net foreign currency losses for the three and nine months ended September 30, 2021 and September 30, 2020:

Nine months ending September 30 and September 30 (in thousands of U.S. dollars) 2021 2020 Three-month change 2021 2020 Nine-month change Foreign currency losses, net $ (1,018) $ (1,852) $ 834 (45) % $ (4,613) $ (3,549) $ (1,064) 30%

The net foreign currency losses for the three months and nine months ended September 30, 2021 are the same as those for the three months and nine months ended September 30, 2020.

Our cash, cash equivalents, securities, restricted cash and restricted securities earn interest income. Interest income also includes interest earned from bills receivable and overdue customer payments.

The following table shows interest income for the three and nine months ended September 30, 2021 and September 30, 2020:

Nine months ended September 30, September 30, (thousands of U.S. dollars) 2021 2020 Three-month change 2021 2020 Nine-month change Interest income $ 1,752 $ 2,109 $ (357) (17)% $ 3,996 $ 15,113 $ 74) The percentage of interest income for the three months ended September 30, 2021 is consistent with the interest income for the three months ended September 30, 2020. The decrease in interest income for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020 was mainly due to lower interest rates on securities and cash and cash equivalents, and lower The average balance related to securities. Net interest expense The net interest expense mainly includes the interest generated by long-term debt, the settlement of interest rate swap contracts, and the fair value changes of interest rate swap contracts that do not meet the hedge accounting requirements of ASC 815. When these costs meet the conditions for interest capitalization At times, we may capitalize interest expenses to our project assets or real estate, plant and equipment, thereby reducing the amount of net interest expenses reported in any given period.

The following table shows the net interest expense for the three and nine months ended September 30, 2021 and September 30, 2020:

Nine months ending September 30 and September 30 (in thousands of U.S. dollars) 2021 2020 Three-month change 2021 2020 Nine-month change interest expense, net $ (2,958) $ (10,975) $ 8,017 (73) % $ (10,577) (21,018) $ 10,441 (50)% Net interest expense for the three months and nine months ended September 30, 2021 and the three months and nine months ended September 30, 2020 The relative decrease was mainly due to the adverse changes in the fair value of interest rate swaps. The contracts that did not meet the hedge accounting conditions in the previous period reduced the amortization and issuance costs of current debt discounts. This was mainly due to the repayment of the Ishikawa Credit Agreement in the previous period and the debt to the project. Related interest expenses are reduced. 52 ------------------------------------------------- ------------------------------- Catalog Other (expense) income, net Other (expense) income, net mainly Including miscellaneous and realized gains and losses from the sale of securities and restricted securities.

The following table shows other (expense) income for the three months and nine months ended September 30, 2021 and September 30, 2020:

Nine months ending September 30 and September 30 (in thousands of U.S. dollars) 2021 2020 Three-month change 2021 2020 Nine-month change Other (expense) income, net $ (2,603) $ (3,236) $ 633 20% $ 2,598 $ (8,653) $ 11,251 130% The net amount of other expenses for the three months ended September 30, 2021 is the same as the net amount for the three months ended September 30, 2020. Net other income for the nine months ended September 30, 2021 increased compared to the nine months as of September 30, 2020, mainly due to expected credit losses related to certain notes receivable in the previous period , Which was partially offset by the fact that the realized income from the sale of restricted securities in the current period was lower than the previous period.

Income tax expenses or income, deferred tax assets and liabilities, and unrecognized tax income liabilities reflect our best estimate of current and future tax payables. We pay income tax in the United States and many foreign jurisdictions where we operate (mainly Japan, Malaysia, and Vietnam). Determining our comprehensive income tax expense requires significant judgment and estimation. The statutory federal corporate income tax rate in the United States is 21%, and the tax rates in Japan, Malaysia and Vietnam are 30.6%, 24% and 20%, respectively. In Malaysia, we have been granted a long-term tax holiday, which is scheduled to expire in 2027. According to this, almost all of our income in Malaysia is exempt from income tax, provided that we continue to comply with certain employment and investment thresholds. In Vietnam, we have received tax incentives, which are scheduled to expire at the end of 2025. According to this, the income earned in Vietnam can be reduced in annual tax rates.

The following table shows the income tax (expense) benefits for the three and nine months ending September 30, 2021 and September 30, 2020:

Nine months ending September 30 and September 30 (in thousands of U.S. dollars) 2021 2020 Three-month change 2021 2020 Nine-month change Income tax (expense) benefits $ (837) $ (38,107) $ 37,270 (98) % $ (67,6)) $ 40,894 $ (108,567) 265% Effective tax rate 1.8% 19.7% 16.7% (16.9)% Our tax rate is affected by recurring items, such as tax rates in foreign jurisdictions and our The relative amount of income earned by the jurisdiction. The ratio is also affected by discrete projects that may occur in any given period, but it is not consistent from period to period. Compared with the three months ended September 30, 2020, the income tax expense for the three months ended September 30, 2021 decreased by USD 37.3 million, mainly due to the decrease in pre-tax income for the current period. Compared with the nine months ended September 30, 2020, the income tax expense for the nine months ended September 30, 2021 increased by US$108.6 million, mainly due to changes in the tax law related to the CARES Act that affected the previous year Discrete tax incentives, and higher pre-tax income for the current period. 53 ------------------------------------------------- ------------------------------- Contents of key accounting policies and estimates GAAP when preparing condensed consolidated financial statements that meet US standards, The estimates and assumptions we make will affect the amount of reported assets, liabilities, income and expenses, and the disclosure of contingent liabilities. Some of our accounting policies require the application of significant judgement in selecting appropriate assumptions to make these estimates. By their nature, these judgments are subject to an inherent degree of uncertainty. Our judgments and estimates are based on our historical experience, our forecasts and other appropriate available information. We believe that judgments and estimates involved in revenue recognition, accrued solar module collection and recycling, product warranty, income tax accounting and long-term asset impairment over time have the greatest potential impact on our condensed consolidated financial statements. The actual results we experienced may differ materially and adversely from our estimates. If there are significant differences between our estimates and actual results, our future operating results will be affected. For an explanation of the accounting policies that require the most important judgments and estimates when preparing our condensed consolidated financial statements, please refer to our annual report on Form 10-K for the year ended December 31, 2020. There are no major changes to accounting policies for the nine-month period ending September 30, 2021.

As of September 30, 2021, we believe that our cash, cash equivalents, marketable securities, cash flow from operating activities, contracts with customers for future solar module sales and subsequent project pipelines will be sufficient to meet our working capital and capital Expenditure and system project investment need to be at least within the next 12 months. According to need, we also believe that we will have enough opportunities to enter the capital market. We monitor our working capital to ensure that we have sufficient liquidity both domestically and internationally. We intend to maintain an appropriate level of debt based on cash flow expectations, our overall cost of capital and expected cash requirements for operations, such as our recently announced construction activities and manufacturing equipment purchases for Indian manufacturing plants and certain system project development activities in international regions. However, if there is insufficient interest from lenders or investors due to company-specific, industry-wide or broader market concerns, our ability to raise funds on commercially acceptable terms may be limited. Any incremental debt financing may lead to increased debt service costs and/or restrictive covenants, which may limit our ability to implement strategic plans. As of September 30, 2021, we had $1.9 billion in cash, cash equivalents, and marketable securities, compared with $1.7 billion as of December 31, 2020. The increase in cash, cash equivalents and marketable securities was mainly derived from the cash income from module sales to customers; the cash income from the sale of our North American O&M business and the US project development business; and the cash income from system project sales and construction; part of the real estate purchased , Plant and equipment; and other operating expenses. As of September 30, 2021, our US$700 million in cash, cash equivalents and marketable securities are held by our foreign subsidiaries and are mainly denominated in US dollars, Japanese yen and Indian rupees. We use various tax planning and financing strategies to ensure that our global cash is available where it is needed. If our business in the United States requires certain international funds, we may need to accumulate and pay certain U.S. and foreign taxes to repatriate such funds. Except for our subsidiaries in Canada and Germany, we maintain our intention and ability to permanently reinvest accumulated earnings outside the United States. In addition, changes in foreign government banking operations 54 ----------------------------------------- --------------------------------------- Directory regulations may limit our ability to transfer funds In some cases, this may have a negative impact on our access to capital, thereby adversely affecting our liquidity and capital resources. We constantly evaluate forecasted global demand and seek to strike a balance between our manufacturing capabilities and such demand. We recently announced plans to invest approximately US$1.3 billion to expand our solar manufacturing capacity by 6.6 GWDC by building our third US manufacturing plant in Laketown, Ohio, and our first manufacturing plant in India. These new facilities are expected to start operations in the first half of 2023 and the second half of 2023, respectively. In addition, we continue to increase the nameplate production capacity of existing manufacturing facilities by increasing production throughput, increasing module wattage (or conversion efficiency), and reducing manufacturing output loss. During 2021, we expect to spend between US$675 million and US$725 million for capital expenditures, including the aforementioned new facilities and machinery and equipment upgrades, which we believe will further increase the wattage of our modules and expand the capacity and throughput of our manufacturing facilities quantity. We also expect to invest a lot of working capital to purchase various raw materials used in our module manufacturing process. Our failure to obtain raw materials and components that meet our quality, quantity and cost requirements in a timely manner may interrupt or impair our ability to manufacture solar modules or increase our manufacturing costs. Therefore, we may sign long-term supply agreements to reduce the potential risks associated with the procurement of key raw materials and parts. Such agreements may be irrevocable or cancelable and impose huge fines. For example, we have entered into a long-term supply agreement to purchase a specific minimum quantity of substrate glass and cover glass for our photovoltaic solar modules. Our remaining purchases under these supply agreements are estimated to be approximately US$1.7 billion for substrate glass and approximately US$380 million for cover glass. We have the right to terminate these agreements after payment of specified termination penalties (as of September 30, 2021, the total amount of penalties is up to 338 million U.S. dollars, which will decrease during the remaining supply period). Our system business is expected to continue to have a large amount of liquidity demand in the future. From time to time, we make commercial commitments in the form of letters of credit, bank guarantees and deposits to provide third parties with financial and performance guarantees, most of which support our system projects. As of September 30, 2021, our net project assets and related parts of deferred income and long-term debt (close to our net capital investment in system project development and construction) were $221.7 million. The solar project development cycle spans a long time from determining the site location to the commercial operation of the system, and it may take many years to mature. Due to these long project cycles and strategic decisions to use our working capital to fund the development of certain projects, we may need to make significant upfront investments in resources before we receive any cash for the sale of such projects. Delays in the construction or completion of sales of our self-funded system projects may also affect our liquidity. In some cases, if project financing cannot be obtained due to market scope, region or other issues, we may need to use only working capital to finance construction costs. Sometimes, we may develop projects in certain markets around the world, and we may hold all or most of the equity in the projects in these markets for several years. Given the duration of these investments and the currency risk of some of these markets relative to the U.S. dollar, we will continue to explore alternatives to local financing. If these financing alternatives are not available or the cost is too high, we may face significant currency risks and our liquidity may be adversely affected. In addition, if we determine that doing so has economic and strategic benefits, we may choose to retain ownership of certain system projects after they are put into operation. For example, if we cannot sell the system with economics that appeal to us, or potential customers are unwilling to assume the typical risks and rewards of system ownership, we may choose to temporarily own and operate the system until we can sell it more. Economically attractive terms. The decision to retain ownership of the system will affect our liquidity, depending on the size and cost of the project. As of September 30, 2021, we have a net photovoltaic solar power system of US$230.4 million55 ------------------------------ - ------------------------------------------------ Table of contents put into use in the international market. We have chosen and may choose to conduct temporary or long-term project financing in the future to reduce the impact of such systems on our liquidity and working capital.

The following table summarizes the main cash flow activities (in thousands) as of September 30, 2021 and September 2020:

For the nine months ended September 30, 2021, 2020 Net cash provided (used in) operating activities $203,092 $ (149,198) Net cash provided (used) in investment activities (83,289) 116,322 Net cash used in financing activities (9,210) (98,196 )

The impact of exchange rate changes on cash, cash equivalents and restricted cash

1,687 1,251 Net increase (decrease) in cash, cash equivalents and restricted cash $ 112,280 $ (129,821)

The increase in net cash provided by operating activities was mainly due to the increase in cash income from module sales and the US$350 million settlement payment related to our previous class actions in 2020, which was partially offset by the decrease in cash proceeds from system project sales during the current period.

The increase in net cash used for investment activities was mainly due to the increase in the purchase of restricted securities and the decrease in the sales and maturity income of the securities, which was partially offset by the sales income of our North American O&M business and U.S. project development business.

The decrease in net cash used in financing activities was mainly due to the repayment of the Ishikawa Credit Agreement in the previous period, which was partially offset by the increase in borrowing income under the project-specific debt financing of certain projects in Japan in the previous period.

Since December 31, 2020, our contractual obligations have not undergone major changes, except for borrowings under project-specific debt financing and other changes in the normal business process. For more information on changes in our long-term debt, please refer to Note 9. "Debt" to our condensed consolidated financial statements. Please also refer to our Annual Report on Form 10-K for the year ended December 31, 2020 for more information about our contractual obligations.

As of September 30, 2021, we have no off-balance sheet debt or similar obligations, except for financial guarantee-related instruments that are not classified as debt. We do not guarantee any third-party debt. For more information about our financial assurance-related tools, please refer to Note 10. "Commitments and Contingencies" in our condensed consolidated financial statements.

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