We appreciate the Enphase strategy

Enphase is an American company that manufactures micro-inverters and power electrical modules for residential and commercial PV systems. The key to the company’s success is the development of an ASIC that addresses the issues of cost savings and increased integration. We believe that semiconductor shortages could put pressure on Enphase Energy’s business through the end of 2021. However, we see high upside potential for the company’s stock, suggesting that supply chains will begin to recover in 2022. We believe the company’s strategic goals for 2022-2023 are feasible, especially given the move to GaN-based architecture, which can have a profound impact on cost and performance. However, we assume as the main risk that SolarEdge will be able to recapture some of the market share that Enphase Energy has grown in the US in 2020.

We love that Enphase is transforming from a solar-focused company to an energy management solutions company for home and business, integrating solar, energy storage, backup power, and energy management functions. As competition in the industry has intensified over the past several quarters, we highly appreciate the company’s strategy to reduce costs in order to partially offset the decline in prices in the industry. In addition, we are optimistic about management’s decision to expand into the storage segment, which should enable Enphase to offer the market a complete energy management solution and generate additional revenue.

Enphase Energy (“Enphase”) designs and manufactures microinverters for the solar industry. Enphase’s product line consists of microinverters and accompanying hardware and technology services, including connection cables, mounting systems and product monitoring and management software. Enphase technology is novel in that it works by assigning a microinverter to each individual panel rather than bulking multiple panels to one inverter. Enphase was founded in 2006 and is headquartered in Freemont, CA.