Enphase Energy is an American solar energy company developing solutions for homes and businesses. As the world shifts increasingly towards renewable energy, Enphase is a key player in the solar power industry. Its microinverter technology is playing an important role in making solar energy capture and conversion more efficient. Enphase is helping to reduce reliance on fossil fuels, a major contributor to climate change.
What problems are Enphase trying to solve?
Enphase’s solar technology provides an alternative solution to fossil fuel energy sources. These contribute to decarbonisation and reducing the carbon footprint of traditional energy consumption. In turn, this helps combat the effects of climate change. The company is tackling a variety of challenges in developing solar energy systems.
Efficiency and reliability of solar energy systems
Solar panel technology has improved in converting and storing the sun’s energy. String inverters are the most common type of technology used in solar panels. It converts the direct current (DC) from the solar panels to alternating current (AC) to use in properties. However, they have a fundamental drawback. The performance of an entire group of solar panels can be compromised if a single panel underperforms or stops working. This can happen if a single panel gets covered by shade, dirt or debris or incurs a fault. As such the full potential of a solar energy system isn’t being harnessed.
Monitoring and maintenance systems
Traditional solar systems often lack comprehensive monitoring capabilities. This makes it difficult for homeowners and businesses to detect and address issues. Without real-time insights, small problems can go unnoticed. This can lead to reduced energy production and costly repairs.
Energy storage
Solar energy systems improve in how much of the sun’s energy they capture and convert so too does the need to effectively store it. Energy storage systems are crucial to provide power when sunlight is less available or unavailable. For example, when it’s cloudy or at night or if there are power outages. A properly integrated storage system and solar panels increase their effectiveness.
How does Enphase create an impact?
The Enphase Energy System helps people make, use, save, and sell their own power. The company’s products enable its users to move further away from reliance on fossil fuels.
Innovative microinverter technology
Enphase specialises in microinverter technology, which, unlike traditional solar energy systems (the string inverters mentioned earlier) optimises the energy output of each panel independently. Instead, if one solar panel underperforms all the other panels will continue to generate power. For example, in a string inverter group of panels, if one panel becomes shaded it’ll drop its efficiency level. All other panels will then also drop their efficiency to that same level. A microinverter, however, provides better performance, reliability and resilience. This results in higher overall energy production.
Solar energy storage
Enphase’s battery system allows the storage of excess solar energy. This can be used at times when solar power isn’t available such as during the night or in a power outage. The combination of improved solar energy capture and storage reduces the need for fossil fuel-based backup power. Enphase IQ Batteries use lithium iron phosphate. Batteries using this chemistry are considered amongst the safest types and it enables them to last longer too. In 2025, the company plans to introduce its 4th generation battery, which will increase the amount of energy it can store by 40%.
Independence from the energy grid
Enphase enables households and businesses to generate and store more of their own energy. This helps them move away from reliance on the National Grid. Decentralising from the Grid helps users to become more resilient to any power disruptions. Additionally, excess energy can be fed back into the National Grid, which users could get paid for.
What’s the size of Enphase’s impact?
Emphase has shipped over 73 million microinverters and four million systems to more than 150 countries. This contributes to the global shift towards renewable energy. As of 2023, Enphase has shipped over 58 million microinverters and supported the installation of more than 3.5 million systems worldwide. Its innovations have led to offsetting 45 million tons of CO2e, the equivalent of providing 3.5 million homes with electricity for one year. In future, the company plans to enhance its battery design. It aims to make them last up to 20 years, increasing long-term reliability.
Enphase as a financial investment
It’s fair to say 2023 was a tough year for the solar energy market overall. This was primarily due to high interest rates in the United States, its domestic market, impacting demand. Enphase’s revenue was relatively flat in 2023 compared to 2022 but this had followed three years of very strong year-on-year growth. Nevertheless, Enphase still ended the year with an increased gross profit margin of 46.2% vs 41.8% in 2022. This was in part due to controlling costs and shipping the newest version of its microinverter technology.
The company also demonstrated its commitment to innovation and shipping its products around the world. In 2023, it introduced the newest version of its microinverter (the IQ8 series). It launched this in Brazil, Mexico, India and Vietnam. There were also significant gains in the European market, growing by 60% in 2023 compared to 2022. So far in 2024, the company’s shown positive quarterly financial performance. For example, revenue increased to $303.5 million in Q2 from $263.3 million in Q1.
Enphase is a pioneer in microinverter technology which is expected to play an important role in the future of solar panel technology. The increases in efficiency this offers means the adoption of this technology is expected to grow and expand domestically and to international markets.
Enphase’s inclusion in the Impact Plan
Enphase has a commitment to innovation which will help it remain at the forefront of solar technology. The efforts it’s making are positively impacting homes and businesses, both commercial and non-commercial sites such as hospitals and schools. It’s well positioned to lead the way in solar energy system development and its influence on the global transition to clean energy.
Risk warning
As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice
