Enphase no longer threatened with delisting

In what must have been greated with a sigh of relief in Petaluma, on Tuesday, microinverter maker Enphase received some good news from NASDAQ. As a result of keeping its stock price above $1 for ten consecutive days, the exchange is no longer threatening to de-list Enphase, dooming it to lower realms of pink sheet stocks.

But Enphase is far from being out of the woods, financially speaking. Despite restructuring that significantly reduced the company’s workforce over the course of the last 12 months and a $50 million bailout in February, the microinverter pioneer is still losing money on a quarterly basis.

With a new CEO from the semiconductor industry appointed earlier this month, Enphase is trying to make a fresh start. However, this CEO will inherit Enphase’s difficulties in competing with power electronics maker SolarEdge, which has aggressively taken market share in the U.S. residential sector, Enphase’s primary market.

The latest data from the U.S. Department of Energy’s National Renewable Energy Laboratories (NREL) shows Enphase’ share of the California market falling sharply from 2014 to 2015 and recovering somewhat in 2016. And while NREL did not show market share data for 2017, EnergySage’s recent market intelligence report shows Enphase’s market share on its marketplace declining again in the first half of 2017, as SolarEdge inverters take an over 50% market share.

Residential inverter market share in California from the California NEM database (Go Solar CA 2017).

NREL

A central problem is that SolarEdge’s module-level power electronics provide similar features to Enphase’s solutions, but at a lower price. And as Enphase has aggressively reduced its prices, including temporarily cutting them to below the cost of production, SolarEdge is still providing less expensive solutions, as shown by NREL.

This is happening in the context of a U.S. residential market which is stuck at flat growth, as the result of multiple challenges in leading markets including an exhaustion of the first adopter demographics.