US microinverter manufacturer Enphase has plans to establish four to six new manufacturing lines in the US by mid-2023 as it seeks to take advantage of manufacturing production tax credits contained with the Inflation Reduction Act (IRA).
The announcement was made as part of the California-headquartered company’s Q3 financial results, which also showed that Enphase shipped more than 4.3 million inverters (1.7GW) and made record revenues of US$634.7 million in the quarter, up 20% on Q2, with European revenue jumping 70%. It had a GAAP gross margin of 42.2% and a GAAP operating income of US$135.4 million.
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Enphase president and CEO Badri Kothandaraman said the company was “actively looking at manufacturing in the US” given the support system in place under the IRA, although he cautioned there remained many legal uncertainties regarding the IRA, as previously reported by PV Tech.
“Once the IRA with details have been finalised and the implementation is clear, the US manufacturing could provide substantial benefits in terms of the production-based tax credit,” noted Kothandaraman on a call with analysts.
The IRA has a US$0.11/W production-based tax credit for domestic manufacturing of microinverters and Enphase intends to capitalise on this by opening up to six new production lines in the country, Kothandaraman said.
“We plan to open four to six manufacturing lines in the US by the second half of 2023. Our thought process is that we will need the additional capacity anyway considering our fast-paced growth globally,” said Kothandaraman, adding the company was “working with three contract manufacturing partners, one new and two we have today already.”
Enphase has seen soaring demand for its products in Europe for self-consumption as the continent’s energy crisis is increasingly causing people to look to residential solar PV, paired with battery storage in many cases.
As such, it is targeting greater growth in the European market following strong tailwinds in the region but is also seeking to draw on the experience of partner companies in Europe to drive growth across the US.
Moving forward, Enphase expects its revenues in Q4 to be within the range of US$680 million to US$720 million, which includes shipments of 120MWh to 135MWh of Enphase IQ Batteries. It expects its GAAP gross margin to be within a range of 39.0% to 42.0%, while its operating expenses are predicted to come in between US$152 million to US$156 million.
Analyst transcript taken from The Motley Fool.
Clarification: this article’s headline was updated on 31 October to clarify that Enphase is planning to build up to six new manufacturing lines, not factories, in the US. PV Tech apologises for any confusion caused…