2024-05-28 16:56:57 ET
Summary
- Residential rooftop solar installation volumes are falling due to higher borrowing costs and changes in regulations and subsidies.
- Enphase, a top producer of microinverters, is facing declining sales and rising inventories, but its balance sheet appears more sustainable than SolarEdge's.
- Tesla's entry into the solar market poses a looming threat to Enphase, but its current financial pressures may give Enphase an advantage.
- Enphase's valuation appears a bit high, given it is not expected to grow for the next five years and could face more significant macroeconomic pressures.
- Geopolitical issues with China's solar trade may be bearish for ENPH because it sells complementary products to solar panels.
The solar industry is facing one of its greatest challenges in its recent history. Residential rooftop solar installation volumes are falling amid a decline in consumer demand stemming from much higher borrowing costs. Changes in government regulations and subsidies have also created an industry headwind....
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For further details see:
Enphase: Managing The Solar Crash Better Than Its Peer