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Enphase (ENPH) IQ8 First to Receive UL 1741 Certification

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Enphase Energy, Inc.(ENPH - Free Report) recently unveiled that its IQ8 Microinverter system is the first in the world to receive the UL 1741, 3rd edition with the SB Supplement, certification from UL – a global safety science leader. The certification epitomizes that Enphase’s IQ8 Microinverter meets the new safety and grid interconnection benchmark.

The certification further signifies that the IQ8 Microinverter meets all the IEEE standards and can be safely connected to the grid. With the certification, ENPH takes a step forward in delivering a safe and reliable energy product to the market.

Benefits of the Certification for Enphase

Enphase’s IQ8 Microinverter, when combined with the IQ Combiner 4/4C and IQ Gateway, forms the first complete residential distributed energy resource that is being certified by UL. Hence, such certification further enhances the Enphase’s position in the North American market and opens avenues for further orders as many states in the United States continue to look for products that meet the safety standard prescribed in the new safety benchmark.

Significance of UL Certification

As a global safety science leader, UL helps companies demonstrate safety, enhance sustainability, strengthen security, deliver quality, manage risks and achieve regulatory compliance. UL is playing an important role in the deployment of advanced inverters in support of renewable energy generation with the publication of UL 1741 SA, Advanced Inverter Testing.

UL 1741 captures the essential requirements of advanced inverters used in renewable energy generation. Specifically, the standard prescribes test methods that assess an inverter’s ability to remain operational, even during abnormal grid conditions that might affect transmission frequency or voltages. Inverters that successfully complete the test per UL 1741 SA requirements not only help increase the reliability of energy from renewable sources but also contribute to a more resilient power grid.

In this context, the recent certification of ENPH’s IQ8 Microinverter system by UL adds impetus to its operational capability and excellency of this product and thereby will assist Enphase in expanding its footprint in the microinverter market.

U.S. Battery Storage Boom

The increased penetration of the solar energy market tends to boost demand for microinverters as they form an integral part of any solar panel. Per the report from Mordor Intelligence, the microinverter market is anticipated to witness a CAGR of 20.8% during the 2021-2026 period.

The expanding size of the microinverter enhances the growth prospects of companies like Enphase Energy and with the recent certification by UL, the revenue generation prospects of the company may increase manifold as it may witness a surge in demand for its microinverters.

Prominent solar players who are likely to benefit from the expanding microinverter market size are SolarEdge Technologies (SEDG - Free Report) and Canadian Solar(CSIQ - Free Report) .

SolarEdge’s DC-AC PV inverter is specifically designed to work with SolarEdge power optimizers. The inverter is only responsible for DC to AC conversion.

The long-term earnings growth rate of SolarEdge stands at 28.5%. The Zacks Consensus Estimate for SEDG’s 2022 sales suggests an improvement of 50.9% over the prior-year estimated figure.

Canadian Solar’s business segment, CSI solar, manufactures string inverters for utility, commercial and residential customers.

The Zacks Consensus Estimate for Canadian Solar’s 2022 sales indicates an improvement of 37.7% over the prior-year reported figure. The Zacks Consensus Estimate for CSIQ’s 2022 earnings suggests a growth rate of a solid 184.9% over the prior-year reported figure.

Price Movement

In the past year, shares of Enphase Energy have decreased 20.3% compared with the industry’s 21% decline.

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Zacks Rank & Stock to Consider

Enphase Energy currently carries a Zacks Rank #3 (Hold). One better-ranked stock from the same industryis SunPower (SPWR - Free Report) , carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for SunPower’s 2022 earnings has been revised upward by 111.8% in the past 60 days. The Zacks Consensus Estimate for SPWR’s 2022 sales indicates an improvement of 20.8% over the prior-year reported figure.