Enphase Energy Inc. ( ENPH Quick Quote ENPH - Free Report) recently commenced shipment of its IQ8P microinverters with a peak output power of 480 watts (W), to Mexico. These microinverters, with a 12-year limited warranty, should enable ENPH to capture more shares of the expanding Mexican solar market. Rationale Behind IQ8P’s Launch in Mexico
A rapid adoption of renewable energy sources has been boosting the solar market in Mexico in recent years. The nation’s regulatory authorities have been playing the role of a key growth catalyst for the solar industry here.
As stated by International Trade Administration, Mexico’s Energy Transition Law and General Climate Change Law require the nation to generate 35% of electricity from clean energy sources by 2024, including power regeneration from renewable sources like solar. Looking ahead, according to a 2022 report by the National Renewable Energy Labs, Mexico’s national technical potential includes 24,918 gigawatts (GW) of solar photovoltaics. This surely reflects the solid demand that Mexico’s solar market has to offer, thereby boosting the need for high-powered solar modules. To cater to such modules, Enphase Energy’s IQ8P microinverters, which come with a peak output AC power of 480 watts and are designed to pair seamlessly with a full range of solar modules up to 670 W DC, seem to be the perfect choice. These microinverters can manage a continuous DC current of 14 amperes, thereby supporting high-powered solar modules through increased energy harvesting. Undoubtedly, the availability of such a remarkable product in Mexico’s solar market will attract solar installers to choose Enphase Energy’s microinverters, thereby fetching notable revenue growth for the company. Growth Prospects in Mexico
Mexico’s solar market provides significant growth opportunities, primarily due to increased investment and deployment of solar plants and various government policies favoring the development. According to a report by Mordor Intelligence firm, the aforementioned solar market is poised to witness a CAGR of 8% during 2020-2025.
Such solid market growth opportunities in Mexico’s solar industry should boost Enphase Energy, which already enjoys a strong presence in this market. Evidently, in 2021, the company launched its Enphase Installer Network (EIN) in Mexico. Notably, EIN members get a state-of-the-art digital platform that delivers sales leads and self-service tools. Members can also utilize the metrics and analytics to boost business efficiency and drive bottom line.
With Enphase Energy’s EIN already available in Mexico’s solar market, the recent launch of the company’s IQ8P will surely strengthen its position in this space.
Global Solar Scenario
The solar market is expanding rapidly, not just in Mexico, but in the entire world. This is driven by several factors like solid installation activities, falling price of solar installation, favorable policies undertaken by governments as well as the steadily increasing household electricity bill from conventional energy sources. To this end, the Mordor Intelligence firm projects the global solar energy market to witness a CAGR of 12.7% over the 2023-2028 period.
This should benefit Enphase Energy, which has a global presence in the solar industry, ranging from the United States, Europe and Australia to India, Puerto Rico and Central America.
Other solar majors that are steadily expanding their footprint in global solar markets have been discussed below.
SolarEdge ( SEDG Quick Quote SEDG - Free Report) : The company’s international presence continues to bolster its revenue generation prospects. It has a strong presence in Germany, the United Kingdom, Switzerland, South Africa and Thailand. SolarEdge expects the momentum to continue to grow in Europe, particularly in Germany, where installation activity is anticipated to rise from 7.5 GW in 2022 to 10 GW in 2024.
SolarEdge boasts a long-term earnings growth rate of 18.7%. Its shares have risen 9.1% in the past month.
Canadian Solar ( CSIQ Quick Quote CSIQ - Free Report) : It caters to a geographically diverse customer base across key markets in the United States, China, Japan, the United Kingdom, Canada and emerging markets in Brazil, India, Mexico, Italy, Germany, South Africa and the Middle East. Of late, the company has expanded its global late-stage project pipeline into nations like Argentina, Australia and South Korea as these markets are expected to see the next phase of industrial growth.
The Zacks Consensus Estimate for Canadian Solar’s 2023 sales indicates an improvement of 4.6% from the prior-year reported figure. The Zacks Consensus Estimate for 2023 earnings implies growth of 20.9% from the prior-year registered number.
First Solar ( FSLR Quick Quote FSLR - Free Report) : The company is steadily expanding its footprint globally by enhancing its manufacturing capacity. In July 2023, First Solar revealed its plans to expand its manufacturing capacity by an additional 3.5 GW by constructing its fifth manufacturing facility in the United States.
The Zacks Consensus Estimate for First Solar’s 2023 sales implies growth of 33.2% from the prior-year reported figure. Shares of FSLR have risen 6.9% in the past month.
In the past year, shares of Enphase Energy have lost 69.9% compared with the
industry’s decline of 57.3%. Image Source: Zacks Investment Research Zacks Rank
Enphase Energy currently carries a Zacks Rank #4 (Sell).
You can see . the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here