US-based microinverter manufacturer Enphase Energy saw a substantial decline in yearly revenues and share price between 2023 and 2024 as the wider inverter market faces challenges.
In 2024, Enphase saw its revenues fall by almost US$1 billion compared with 2023 – down from US$2.29 billion to US$1.33 billion. Net income also fell to US$102,658 from over US$430,000 in 2023. Concurrently, the company’s basic earnings per share fell from US$3.22 to US$0.76.
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Gross margin for the year increased slightly to 47.3%.
The final quarter of the year saw a slight increase in profitability, with revenues for Q4 2024 rising by around US$2,000 compared with Q3, to US$382,712. Net income increased from US$49,762 in Q3 to US$62,160 in Q4.
Enphase revised down its forecast for its Q4 revenues following sustained low sales figures over the year.
The graph below shows the extent of the decrease in Enphase’s microinverter shipments; the company shipped roughly the same capacity in the first three months of 2023 as in the first three quarters of 2024. Shipments in Q4 reached 878MW, the highest for any quarter in 2024—which the company cites for the quarterly revenue increase—but still a dramatic fall compared with the highs of 2022 and 2023.
Market demand shifting
In Europe, falling electricity prices and the impacts of global inflation have pushed down the installation rates of rooftop solar, which impacted the sales of many major inverter manufacturers over the last year. Enphase said its European revenue decreased by approximately 25% from Q3 to Q4 last year, which it said was “the result of a further softening in European demand.”
Enphase also pointed to a European slump when it announced 500 job cuts and the abandonment of a manufacturing contract in Mexico late last year. Major German inverter manufacturer SMA Solar and Israel-headquartered producer SolarEdge have also announced lay-offs and restructurings in response to falling sales and revenues.
The company’s US sales increased by 6% in Q4, though the wider US residential market is also facing decreased demand. This is largely driven by changes to the net energy metering (NEM) consumer repayments scheme in California – the leading state for distributed solar capacity – which has seen installation rates fall significantly over the last two years.
Inverter solutions evolving
In an interview with PV Tech Premium, Cormac Gilligan, associate director of clean energy technology at S&P Global, said that technological requirements were combining with these shifting market dynamics to cause “growing pains” in the inverter industry.
California’s NEM policy changes shifted the incentive from encouraging standalone solar to residential energy storage. Combined with increasing electrification throughout society, heat pumps and electric vehicle usage, inverters now require a “new level of sophistication” in how they interact with both the home and the grid, Gilligan said.
For its part, Enphase has launched a NEM 3.0 product targeted specifically at the Californian market – as well as a residential power control product – designed to adapt to the increasingly complex relationship between ‘prosumers’ and the grid.
Looking to the first quarter of 2025, Enphase expects revenues between US$340-380 million and net IRA benefits of US$36-39 million based on shipping around 1.2 million microinverters from the US.
