Enphase has expanded its production agreement with global contract manufacturer Flex Group to set up production in Mexico, per a company announcement. Flex will begin to deliver Enphase devices produced in Mexico to the U.S. market starting in the second quarter of 2019.
The company states that this is part of a mitigation plan for the impending Section 301 tariffs on inverters and other products imported to the United States from China. And while it did not state what products would be manufactured in Mexico, the reference to Section 301 indicates that its microinverters will be included.
Enphase has not said what the capacity of the Mexico facility will be.The first partnership agreement with the Flex group had been signed by Enphase in June 2017, and following this the company’s products have been made by Flex solely in China.
The Flex group operates a production center in the Mexican city of the Guadalajara in Mexico. The center is located in the so-called “Silicon Valley” of Mexico, where most of the production of digital and electronic components is concentrated.
While Enphase’s microinverters have provided clear benefits to some rooftop solar installations and were widely used in the residential sector for several years, the company has had problems competing with SolarEdge, whose products offered similar benefits to minors costs.
This existential threat led to a dramatic internal reorganization of the company, and in the last two years Enphase has shifted executives, reduced costs, cut staff and reorganized its priorities, in addition to carrying out a series of technological innovations.
This has resulted in a dramatic turnaround in company finances, with Enphase moving from heavy losses to nearly breaking even in its most recent quarterly results.