The U.S. residential solar slump continues to weigh on Enphase, but the company says it is actively working through the downturn instead of waiting for the market to recover on its own.
Following another sharp drop in revenue, the solar equipment maker said stronger business in Europe, expanded financing options, and newer battery and commercial products are key parts of its current playbook, according to pv magazine USA.
What happened?
On its July 28 second-quarter earnings call, Enphase said revenue fell 20% year over year for the second consecutive quarter, while executives maintained that the company still has several ways to navigate the slowdown.
Enphase CEO Badri Kothandaraman said Europe was a brighter area for the company in the quarter, with sales there up 35%.
He said Enphase adjusted pricing to strengthen the value proposition of its third-generation microinverters and is also pursuing battery demand in countries including France and Norway.
In the U.S., Kothandaraman pointed to a partnership with SolSource Solutions and TriBeam Financial that is being used to offer prepaid solar leases through Propel. Those offerings combine Enphase microinverters and battery systems with the company's ongoing operations and maintenance services.
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During the second quarter, Propel expanded from four states to six, and Enphase said it expects to be in 12 states by the end of the third quarter.
Kothandaraman said the program is now starting nearly 200 installations per week, with batteries included in about three-quarters of those projects.
Why does it matter?
Enphase's guidance also highlights how severe the U.S. solar downturn remains.
The company forecast third-quarter revenue of $290 million to $320 million. At the midpoint, that would be about 25.7% below the $410.4 million it posted in the same quarter last year.
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Kothandaraman also said a new Federal Communications Commission policy that blocks additional inverter models from foreign companies could give Enphase an opening to gain share in small commercial.
What's being done?
The company is also looking beyond the market segments where demand has been weakest.
Along with its residential financing efforts, Enphase is continuing development of the IQ Vault 80, a commercial battery designed to provide 80 kilowatt-hours of storage and 40 kilowatts of continuous output.
Enphase is separately developing the IQ SST solid-state transformer for AI data centers.
Kothandaraman and Enphase chief product officer Raghu Belur said its modular design could fit a variety of configurations while relying on the same core power module.
Belur said Enphase expects to finish a full version by year-end. Kothandaraman said that would be followed by pilot projects in 2027 and broader shipments in 2028.
Describing the company's stance, Kothandaraman said, "We are not stopping and waiting. We are not waiting for things to improve. We are taking matters into our own hands."
Belur said the upcoming transformer could "open the gates for much bigger conversation(s) and pilots."
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