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Enphase (ENPH) and Enerix Team Up for Expansion in Europe

Enphase Energy, Inc. ENPH recently clinched a partnership agreement with a Germany-based service provider, Enerix, for distributed energy systems to expand its footprint in Europe.

Rationale Behind the Deal

Enerix boasts a group of 100 franchise partners in Germany and Austria, which assists companies like Enphase to increase their product deployment in Europe. The company has wide experience in installing more than 10,000 solar systems in 2022.

Such capability will allow Enphase to expand in the European region more effectively amid the rising interest of homeowners to switch to solar-based energy as energy prices continue to soar in the region.

Enphase’s Growth Plans in Europe

Enphaseintroduced IQ8 Microinverters in France and the Netherlands in the second half of 2022 to capitalize on the growing solar demand. Since its launch, the company has witnessed increased demand for its products.

To further tap growth in the European solar market, ENPH plans to add an automated production line at Flex's factory in Romania. This line will have a quarterly capacity of approximately 750,000 microinverters, starting in the first quarter of 2023, and enable a global capacity of nearly six million microinverters per quarter. Such capacity maximization should boost Enphase’s shipment count, bolstering its revenues.

The recent deal with Enerix will boost Enphase’s footprint in Germany and Austria and enable the company to bolster its revenue generation prospects. The company also enjoys an established position in Belgium and is gauging expansion opportunities in Spain, Portugal and Poland.

Going forward, the company expects healthy high-double-digit growth between 2022 and 2023.

Global Solar Market Boom

Per the report from Allied Market Research, the global solar energy market is poised to witness a CAGR of 20.5% by 2026. This should benefit solar companies like Enphase and prominent solar players like SolarEdge Technologies SEDG, Canadian Solar CSIQ and ReneSola SOL.

SolarEdge Technologies’ optimized inverter solutions address a broad range of solar market segments. In the third quarter, the company witnessed record solar revenues, driven by the strong demand for its solar products across all segments and geographies.

SolarEdge registered record revenues in 14 European countries, most notably in Germany, the Netherlands, France and the United Kingdom. The long-term (three to five) earnings growth rate of SolarEdge stands at 34.5%. Shares of SEDG have risen 28.7% in the past year.

Canadian Solar has one of the world’s largest utility-scale solar project development platforms. It caters to a geographically diverse customer base across key markets in the United States, China, Japan, the U.K. and Canada, and emerging markets in Brazil, India, Mexico, Italy, Germany, South Africa and the Middle East.

The Zacks Consensus Estimate for Canadian Solar’s 2022 sales indicates an improvement of 39.1% over the prior-year reported figure. Shares of CSIQ have delivered 45.9% in the past year.

ReneSola continues to benefit from a steady flow of contracts from domestic and international customers. With the successful execution of its downstream strategy, SOL is currently expanding its business in international markets. It is committed to adding an incremental project pipeline to its core markets, including the United States, the United Kingdom, Spain, Poland, France, Germany and Hungary.

The Zacks Consensus Estimate for 2022 sales suggests a growth rate of 9.5% from the prior-year reported figure. ReneSola shares have increased 14.2% in the past three months.

Price Movement

In the past year, shares of Enphase Energy have soared 49.6% compared with the industry’s growth of 42.7%.

Zacks Investment Research
Zacks Investment Research

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.

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Renesola Ltd. (SOL) : Free Stock Analysis Report

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