Enphase CEO Badri Kothandaraman shared on a ROTH Capital Partners webinar that his company will be adding four to six microinverter manufacturing lines in the United States.
The new lines are expected to add between 4.8 GW to 7.2 GW of new capacity, producing up to 18 million microinverters annually.
Kothandaraman said that his firm believes it will be able to keep a majority of the $0.11 per Watt production tax credit (PTC) released under the Inflation Reduction Act, though uncertainty remains on how these credits will be paid out. He said that Enphase will not make a significant investment in U.S. manufacturing unless his firm can secure a significant return on investment and retain 50% or more of the PTC value.
Enphase said it plans to work with three contract manufacturers on the new capacity, two of which are current partners. Kothandaraman said his company will commit to at least three lines regardless of the PTC credit results to meet expected growth.
Kothandaraman said that Enphase expects steady growth in the U.S. residential sector, while the EU region has “hyper growth.” He expects that 2022 EU growth will more than double year-over-year, after already doubling in 2021. ROTH said there remains potential for another doubling in 2023, though Enphase’s management has set more conservative guidance.
The ROTH webinar also touched on future plans for Enphase’s next model of microinverter: the IQ9. The new product is expected to be introduced in 2024, and may be powerful enough to support up to 650 W panels. The IQ8 is expected to reach 50% to 60% of the company’s sales mix by the end of 2022 and is on pace to reach 90% of Enphase sales by Q2, 2023. The company also shared it does not expect any price increases on its products in the near-term.
Kothandaraman expressed optimism that Enphase will be able to keep “the majority” of the PTC, which ROTH earlier had advised as unlikely. This development was received as positive for ROTH, which reiterated a “buy” rating and revised its share price target for ENPH from $310 to $360.
Enphase’s leading product, the IQ8, is a microinverter capable of forming a microgrid during a power outage, allowing for backup power without the need for a battery. The IQ8 can limit energy capture to just what the home is consuming, switching seamlessly between on-grid and off-grid operations.
“We began piloting the product in the third quarter of 2021 with select installers and the feedback has been great. Homeowners not only get backup power with sunlight, but also have the flexibility to add more solar or batteries in the future as their needs change,” said Kothandaraman.
The Enphase Energy System with IQ8 comes in four different configurations: “Solar Only”; “Sunlight Backup” with no battery and the addition of IQ Load Controller to only support essential loads during an outage; “Home Essentials Backup” with a small battery; and “Full Energy Independence” with a large battery. While the first configuration is a standard grid-tied system, the remaining configurations are grid-agnostic systems that need the Enphase IQ System Controller 2 (formerly called Enpower smart switch) to island the home during an outage.
“After installing IQ8 it’s clear that this technology could be a breakthrough moment for reliable home solar power,” said Mike Teresso, president of Baker Electric Home Energy, an Enphase installer partner based in California.
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