Image source: Canadian Solar.

What: Shares of solar manufacturer Canadian Solar (NASDAQ:CSIQ) fell 15% in March after reporting disappointing earnings in the final quarter of 2015.

So what: Module shipments rose from 1.15 GW a quarter earlier to 1.43 GW and net revenue jumped from $849.8 million to $1.12 billion. And net income more than doubled sequentially to $62.3 million, or $1.05 per share, helped by $144.5 million of project sales in Canada.  

The main problem is that Canadian Solar has waffled on launching its own yieldco, which wouldn't likely be palatable now given the high dividend yields existing yieldcos have on the market (yieldcos need low dividend yields to buy projects at attractive prices from sponsors). Now, it appears that Canadian Solar will have to sell projects to third parties, which will likely lead to lower margins than might have been possible otherwise.  

Now what: With an estimated 1.1 GW of projects expected to be complete by the end of 2016, Canadian Solar has to find something to do with these assets. It can't afford to build projects on the balance sheet, continuing to add leverage. It'll have to sell and may even have to do so at unattractive prices if the market doesn't recover. That's the fear investors clung to in March and it'll be key for the company to execute sales effectively if there is no yieldco on the horizon.