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<SEC-DOCUMENT>0000950123-09-049860.txt : 20091207
<SEC-HEADER>0000950123-09-049860.hdr.sgml : 20091207
<ACCEPTANCE-DATETIME>20091013103332
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0000950123-09-049860
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20091013

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			Canadian Solar Inc.
		CENTRAL INDEX KEY:			0001375877
		STANDARD INDUSTRIAL CLASSIFICATION:	SEMICONDUCTORS & RELATED DEVICES [3674]
		IRS NUMBER:				000000000
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		675 COCHRANE DRIVE, EAST TOWER
		STREET 2:		6TH FLOOR
		CITY:			MARKHAM
		STATE:			A6
		ZIP:			L3R 0B8
		BUSINESS PHONE:		(85-512) 6690-8088

	MAIL ADDRESS:	
		STREET 1:		NO. 199 LUSHAN ROAD, SUZHOU NEW DISTRICT
		STREET 2:		SUZHOU
		CITY:			JIANGSU
		STATE:			F4
		ZIP:			215129
</SEC-HEADER>
<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.htm
<TEXT>
<HTML>
<HEAD>
<TITLE>corresp</TITLE>
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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">&#091;Letterhead of Canadian Solar Inc.&#093;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">October&nbsp;13, 2009
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>VIA EDGAR AND FACSIMILE</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Mr.&nbsp;Jay Mumford, Senior Attorney<BR>
Mr.&nbsp;Joseph McCann, Staff Attorney<BR>
Division of Corporation Finance<BR>
Mailstop 3030<BR>
Securities and Exchange Commission<BR>
100 F Street, N.E.<BR>
Washington, D.C. 20549

</DIV>

<DIV align="left" style="margin-top: 12pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left"><B>Re:</B></TD>
    <TD>&nbsp;</TD>
    <TD><B>Canadian Solar Inc.<BR>
Form&nbsp;20-F for the fiscal year ended December&nbsp;31, 2008<BR>
filed on June&nbsp;8, 2009 (File No.&nbsp;001-33107)</B></TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Dear Mr.&nbsp;Mumford and Mr.&nbsp;McCann,

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This letter sets forth the responses of Canadian Solar Inc. (the &#147;Company&#148;) to the comments
contained in the letter dated October&nbsp;8, 2009 from the staff of the Securities and Exchange
Commission (the &#147;Staff&#148;) regarding the Company&#146;s annual report on Form 20-F for the year ended
December&nbsp;31, 2008 (the &#147;Form 20-F&#148;) and the Company&#146;s response letter dated September&nbsp;17, 2009.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For ease of review, we have set forth below each of the numbered comments of the Staff&#146;s
letter and the Company&#146;s responses thereto. We will file Amendment No.&nbsp;1 on Form 20-F/A (the &#147;Form
20-F/A&#148;) to the 2008 Form 20-F in response to the Staff&#146;s comments after the Staff&#146;s review.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Item&nbsp;4. Information on the Company, page 25</B></U><BR>
<U><B>Silicon Raw Materials, page 30</B></U>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>1.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>We note your response to our prior comment 1 and your proposed revised Business Overview
disclosure.</B></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Please expand your disclosure to describe the significance of the two ten-year
agreements with LDK and your agreement with Deutsche Solar that you have not yet
renegotiated. For example, please discuss in quantitative terms your reliance on these
suppliers under these agreements. Please also describe how significant these
agreements are if you are not able to renegotiate purchase price terms.</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>Please revise to clarify how recently you reached &#147;mutual understandings with Neo
Solar and JACO to adjust purchase prices&#148; and when &#147;in the near future&#148; you</B> </TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #textcolor#; background: #bgcolor#">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>anticipate documenting these agreements. Please clearly disclose when the new &#147;prevailing market
price&#148; structure took effect or when it will take effect.</B></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>We advise the Staff that due to the decline in market prices for solar wafers beginning in
the fourth quarter of 2008, we have not commenced purchasing solar wafers under our two
ten-year supply agreements with LDK Solar Co., Ltd., or LDK. We are purchasing solar wafers
from LDK under our three-year supply agreement and from Deutsche Solar AG, or Deutsche
Solar, under our twelve-year supply agreement, in each case, in reduced volumes, given the
ample market supply of solar wafers at lower prices. We believe that given the current
over-supply in the marketplace, we can obtain sufficient supplies of solar wafers for our
estimated 2009 production requirements from other sources at competitive prices. Therefore,
we believe that we do not substantially rely on LDK or Deutsche Solar, our long-term supply
agreements with such suppliers, or our ability to renegotiate price terms to obtain solar
wafers in adequate volumes and at competitive prices.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>However, we have made advance payments to LDK under the ten-year agreements and to Deutsche
Solar under our twelve-year agreement. The advance payments are credited against the
purchase prices that we are required to pay under these agreements. As of December&nbsp;31, 2008,
the balance of non-refundable advance payments that we made to LDK and Deutsche Solar was
$14.8&nbsp;million and $12.5&nbsp;million, respectively. If we cannot renegotiate the purchase price
terms under our agreements with LDK or Deutsche Solar, we may not purchase sufficient
quantities of wafers to recoup our advance payments to these suppliers and we may be subject
to penalties amounting to 1% of the purchase prices that we are required to pay, as a result
of our suspended or reduced purchases under these agreements.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In response to the Staff&#146;s comments, we will revise the referenced disclosure in &#147;Item&nbsp;4.
Information on the Company &#150; B. Business Overview &#150; Supply Chain Management &#150; Silicon Raw
Materials&#148; in the Form 20-F/A as follows:</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>&#147;</I>In 2007, we entered into a three-year agreement with LDK, as supplemented in February&nbsp;2008,
pursuant to which (i)&nbsp;we purchase specified quantities of solar wafers and (ii)&nbsp;LDK converts
our reclaimed silicon feedstock into wafers under a toll manufacturing arrangement. In 2008,
we entered into two ten-year agreements with LDK pursuant to which we purchase specified
quantities of solar wafers. In 2008, we entered into a two-year agreement with GCL Silicon
Technology Holdings Inc., or GCL, pursuant to which we purchase specified quantities of
polysilicon from GCL. We also entered into an agreement with GCL in 2008 for a six-year term
commencing in 2010 pursuant to which we will purchase specified quantities of solar wafers.
In addition, we entered into long-term agreements with suppliers such as Deutsche Solar, Neo
Solar and JACO. As of December&nbsp;31, 2008, our purchase obligations under our long-term
agreements with LDK and GCL accounted for an aggregate of 72.1% of our commitments under
long-term contracts.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In 2009, we amended our three-year agreement with LDK and our agreements with GCL to (i)
adjust purchase prices based on prevailing market prices at the time we place each purchase
order, and (ii)&nbsp;revise terms with respect to the quantity of products we are required to
purchase, </TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->2<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #textcolor#; background: #bgcolor#">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>among other terms. Furthermore, we reached a mutual understanding with Neo Solar
and JACO in January&nbsp;2009 to adjust purchase prices based on prevailing market prices at the
time of each purchase. Based on this mutual understanding, we have been purchasing solar
cells and silicon materials at prevailing market prices at the time we place each purchase
order from Neo Solar and JACO since January&nbsp;2009. As of December&nbsp;31, 2008, our advance
payments to Neo Solar and JACO under these long-term agreements that had not been credited
against the purchase prices that we were required to pay under the respective agreements
were nil and $8.5&nbsp;million, respectively. We intend to sign amendments to the supply
agreements with Neo Solar and JACO to document our mutual understanding with these
companies. We do not have any definitive timeline as to when we will execute these
amendments.</TD>
</TR>
<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>We are still renegotiating the unit price and volume terms in the two ten-year agreements
with LDK and our twelve-year agreement with Deutsche Solar. We have not commenced purchasing
solar wafers from LDK under the two ten-year agreements. We are purchasing solar wafers
from LDK under the three-year agreement and from Deutsche Solar under the twelve-year
agreement, in each case, in reduced volumes, given the ample market supply of solar wafers
at lower prices. Although we expect to continue to purchase from, and maintain solid
relationships with, these long-term suppliers, we believe that given the current over-supply
in the marketplace, we can obtain sufficient supplies of solar wafers for our estimated 2009
production requirements from other sources at competitive prices.&#148;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In addition, we will revise the risk factor relating to advance payments as follows in the
Form 20-F/A to discuss the risk that if we are unable to successfully renegotiate our
agreements with LDK and Deutsche Solar and satisfy the purchase volume requirements under
these agreements, we may not be able to recoup the advance payments and we may be subject to
penalties:</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>&#147;Advance payments to our polysilicon and solar wafer suppliers and credit term sales offered
to some of our customers expose us to (i)&nbsp;credit risks with respect to such suppliers and
customers and (ii)&nbsp;the risk of not recouping our advance payments if we purchase
insufficient quantities of wafers from our suppliers, each of which could have a material
adverse effect on our results of operations.</I></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Under supply contracts with certain of our multi-year solar wafer suppliers, and consistent
with historical industry practice, we have made advance payments to some of our suppliers
prior to the scheduled delivery dates for polysilicon and solar wafer supplies. The advance
payments were made without collateral for such payments and are credited against the
purchase prices that we are required to pay under the agreements. As of December&nbsp;31, 2008,
the balance of non-refundable advance payments that we made to LDK Solar Co., Ltd., or LDK,
Deutsche Solar AG, or Deutsche Solar, and Jaco Solarsi Limited, or JACO, was $14.8&nbsp;million,
$12.5&nbsp;million and $8.5&nbsp;million, respectively. Due to the decline in market prices for solar
wafers beginning in the fourth quarter of 2008, we have not commenced purchasing solar
wafers under our ten-year supply agreements with LDK while we are renegotiating the price
and volume terms of such agreements. In addition, we have reduced our purchases of solar
wafers under our three-year agreement with LDK and our twelve-year agreement with </TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->3<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #textcolor#; background: #bgcolor#">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Deutsche Solar. We are renegotiating the unit price and volume terms under the two ten-year
agreements with LDK as well as our twelve-year agreement with Deutsche Solar. If we cannot
successfully renegotiate and satisfy the purchase volume requirements under these
agreements, we may not be able to recoup these advance payments. In addition, we offer some
customers unsecured short-term and/or medium-term credits based on our relationships with
them and market conditions. As a result, our claims for such payments or sales credit would
rank as unsecured claims, which would expose us to the credit risks of our suppliers and/or
customers in the event of their insolvency or bankruptcy. We employ a number of mechanisms
to mitigate credit sales risk, such as export credit insurance, factoring arrangements and
letters of credit. Additionally, we have been renegotiating our supply agreements to obtain
more favorable payment terms. However, these risks may have a material adverse effect on our
financial condition, results of operations and liquidity.&#148;</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Item&nbsp;5. Operating and Financial Review and Prospectus, page 41</B></U><BR>
<U><B>Liquidity and Capital Resources, page 57</B></U>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>2.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>We note your response to prior comment 4. Please expand your proposed disclosure to include
the material terms of your $251.2&nbsp;million bank lines.</B></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In response to the Staff&#146;s comments, we will add the following disclosure in &#147;Item&nbsp;5.
Operating and Financial Review and Prospectus &#150; B. Liquidity and Capital Resources &#150; Cash
Flows and Working Capital&#148; in the Form 20-F/A:</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;As of May&nbsp;31, 2009, our bank lines had an aggregate capacity of $251.2&nbsp;million. As of May
31, 2009, approximately $45.4&nbsp;million of long-term borrowings, of which $29.3&nbsp;million was
secured by our plant and equipment, and $96.5&nbsp;million of short-term borrowings, of which
$31.3&nbsp;million was secured by our land and buildings, were drawn under the bank lines. The
long-term borrowings mature at various times during 2010 and 2011 and bear interest at rates
of between 0% and 7.560% per annum. The short-term borrowings mature at various times
during 2009 and 2010 and bear interest at rates of between 2.356% and 5.580% per annum. Our
bank lines contain no specific extension terms but we have historically been able to obtain
new short-term loans on terms similar to those of the maturing short term loans shortly
before they mature. As of May&nbsp;31, 2009, $109.3&nbsp;million of short-term borrowings with terms
of less than one year were available for drawdown under the bank lines at interest rates to
be negotiated by the parties. As of May&nbsp;31, 2009, no long-term borrowings remained
available under the bank lines.&#148;</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><B>Item&nbsp;7. Major Shareholders and Related Party Transactions, page 76</B></U><BR>
<U><B>Shareholder Loans, page 78</B></U>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>3.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>We note your response to the fifth bullet point in comment 5. Please quantify the amounts of
Dr.&nbsp;Qu&#146;s consulting fees that were &#147;fully repaid in 2008&#148;. Also, tell us where you have
disclosed the loan interest paid by the company to Dr.&nbsp;Qu in 2008 in the amount of $737,543,
as identified in the fourth paragraph in note 13 on page F-29. Finally, tell us</B> </TD>
</TR>

</TABLE>
</DIV>
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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #textcolor#; background: #bgcolor#">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>whether there is interest accruing to the $93,641 loan from Dr.&nbsp;Qu and whether this loan has a fixed due
date.</B></TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In response to the Staff&#146;s comments, we will add the following revised disclosure in the
&#147;Related Party Transaction&#148; section in the Form 20-F/A:</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Dr.&nbsp;Qu, our chairman, president, chief executive officer and major shareholder, made loans
to us from time to time during 2006 and 2007. These loans were unsecured, interest free and
had no fixed repayment term. As of December&nbsp;31, 2006 and 2007 these loans amounted to
$101,489 and $5,615, respectively. These loans were settled as of March&nbsp;31, 2008. In June
2008, Dr.&nbsp;Qu made a loan to us of $30.0&nbsp;million. This loan was unsecured, bore interest at
the rate of 7% per annum and had no fixed repayment term. As of December&nbsp;31, 2008, we
repaid Dr.&nbsp;Qu $30.7&nbsp;million, including $737,543 in interest, in full satisfaction of our
obligations to Dr.&nbsp;Qu.&#148;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>&#147;Prior to December&nbsp;2005, we paid Dr.&nbsp;Qu compensation for his services in the form of
consultancy fees, on a quarterly basis, to a consulting company owned by him. The
consultancy agreement was an oral arrangement and provided for consultancy fees to be paid
to Dr.&nbsp;Qu&#146;s consulting company in return for project consulting, general management and
technology services that he provided to us. We terminated the consulting agreement with
Dr.&nbsp;Qu&#146;s company in November&nbsp;2005. All consulting fees in the aggregate of $203,103, which
were unsecured and interest free, were paid in March&nbsp;2008. As of December&nbsp;31, 2008, we had
no outstanding balance payable to Dr.&nbsp;Qu for consulting fees.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>In 2008, Dr.&nbsp;Qu lent us $93,641, which he was awarded by Suzhou Science and Technology
Bureau. This loan is interest free and has no fixed repayment term. As of December&nbsp;31,
2008, the amount outstanding under this loan was $93,641.&#148;</TD>
</TR>

</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>*</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>*</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>*</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Company hereby acknowledges that:</TD>
</TR>

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</DIV>

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<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Company is responsible for the adequacy and accuracy of the disclosure in the
filing;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>staff comments or changes to disclosure in response to staff comments do not
foreclose the Commission from taking any action with respect to the filing; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Company may not assert staff comments as a defense in any proceeding initiated
by the Commission or any person under the federal securities laws of the United States.</TD>
</TR>

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</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->5<!-- /Folio -->
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If you have any additional questions or comments regarding the 2008 Form 20-F, please
contact the undersigned at &#043;86 512 6690 8088 Extension 223, or our U.S. counsel, Latham &#038; Watkins,
attention: David Zhang at &#043;852 2912 2503. Thank you.
</DIV>

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<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Very truly yours,<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" style="border-bottom: 1px solid #000000" align="left">/s/ Arthur Chien
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Arthur Chien&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Chief Financial Officer<BR>
Canadian Solar Inc.&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">cc: Shawn Qu, Chairman, President and Chief Executive Officer, Canadian Solar Inc.

</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">&#091;Signature page to response letter&#093;
</DIV>



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