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Enphase Energy (ENPH) Inks Deal to Supply IQ 7 in Philippines

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Enphase Energy, Inc. (ENPH - Free Report) recently signed a distribution partnership agreement with Philippines’ solar energy provider, MSpectrum. Per the terms of the deal, MSpectrum will supply Enphase’s IQ 7 family of microinverters to its residential and commercial installers across the nation, starting from first-quarter 2021.

Also, as part of this agreement, Enphase Envoy communications gateways will be attached with MSpectrum’s solar installations to conduct easier per-panel energy monitoring and provide insights for operations and maintenance.

Growing Solar Opportunities in Philippines

In Philippines, the government had introduced Renewable Energy Act of 2008 to promote the transition from fossil fuel-based electricity generation to renewable energy-based electricity generation, and make renewable energy investments competitive in the country. As stated in a report by MarketWatch, the government aims to increase solar PV installations to reach 3 gigawatts (GW) of utility solar in 2022. On the other hand, it predicts cumulative solar installation to reach 8.7 GW by the end of 2030, with solar rooftops constituting 35% of the total installations.

These projections boost the Filipino solar market’s growth opportunities and may have encouraged Enphase to sign the latest deal with MSpectrum.

Why IQ 7?

Apart from its proven performance and reliability, what makes Enphase’s IQ 7 family of microinverters stand out is the in-built rapid shutdown device (RSD). With more than an aggregated one million hours of cumulative power-on testing to help ensure exceptional performance under heat, high humidity, salty air and cold, the IQ 7 family of microinverter is a perfect device that is compatible with Philippines’ hot, humid and coastal conditions.

Considering the aforementioned growth opportunities of the Philippine solar market and Enphase IQ 7’s compatibility with the local weather, we believe the latest deal between Enphase and MSpectrum to be a strategic one.

Global Solar Boom

Driven by rapid decline in cost of solar installations, along with growing solar investment from big corporate houses, the global solar market has been rallying over the past decade. Per a report by Fortune Business Insights, global solar power market size is projected to reach 4766.8 MW in 2026 from 2019, exhibiting a CAGR of 30.7%.

To reap the benefits of this expanding global solar market, Enphase Energy and other solar players are making every possible effort. In 2019, Enphase Energy’s serviceable available market (SAM) was worth $3.3 billion, which the company expects to reach $12.5 billion in 2022.

First Solar (FSLR - Free Report) ended 2019 with net bookings of 6.1 GW. The company expects to increase its nameplate Series 6 manufacturing capacity to 6 GW by 2020 and 8 GW by year-end 2021.

In 2019, JinkoSolar (JKS - Free Report) reported record high solar module shipment of 14.3 GW. For 2020, it projects total solar module shipments of 18-20 GW.

During 2019, ReneSola (SOL - Free Report) connected about 60 MW of projects. Its project pipeline in core markets is expected to reach 1 GW by the end of 2020.

Price Performance & Zacks Rank

In a year’s time, shares of Enphase have gained 544.5% compared with the industry’s rise of 174.7%.

The company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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