SolarEdge navigates Vietnam factory shutdown to post record solar revenues in Q3 2021

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on reddit
Reddit
Share on email
Email
At US$476.8 million, SolarEdge’s revenue from solar products set a new record in Q3 2021. Image: SolarEdge.

Inverter manufacturer SolarEdge posted record revenues from its solar division in Q3 2021 despite a COVID-related shutdown at its manufacturing facility in Vietnam impacting its ability to meet demand.

SolarEdge confirmed total revenues for Q3 2021 of US$526.4 million, up 10% sequentially and a 56% increase on its total revenue figure in Q3 2020, while also representative of a new quarterly revenue record for the company. Solar-related revenues also rose to a new record, up 11% sequentially and 55% year-on-year to US$476.8 million – towards the top end of its guidance for the period.

While the gross margin of its solar division slipped slightly on Q2 2021 to 36.6%, SolarEdge noted it shipped 1.9GWac of solar inverters during the reporting period despite turbulence in its supply chain caused by a shutdown at its Vietnam manufacturing facility, which produced 20 – 25% of its total inverter output.

SolarEdge initially revealed in August that its Vietnam facility had been ordered to shutter as a result of COVID-related lockdowns in the country, however the shutdown continued for far longer than initially expected, going on to last some 12 weeks. The factory eventually reopened last month and is now expected to ramp back up to full capacity by mid-November, however the shutdown has created a gap in the supply of inverter products for Q4 that will take time to replenish, and at a higher cost incurred as a result of an escalation of supply chain headwinds, chief executive Zvi Lando said.

Lead times for inverters are currently between 12 – 14 weeks, Lando noted.

The shutdown of its facility in Vietnam prompted SolarEdge to reallocate manufacturing capacity to other locations, most notably China. Lando said the company incurred further costs in shipping components from Vietnam to China, and the resulting shift in manufacturing capacity to China resulted in a greater proportion of SolarEdge’s products originating from jurisdictions where it incurred import tariffs. During the quarter, some 47% of SolarEdge’s products were shipped from nations subject to import tariffs – namely China – in comparison to just 12% in Q2.

Lando further added that the disruption caused by the Vietnam facility shutdown had prompted the company to accelerate plans for an expansion of its manufacturing capacity in Mexico. That new facility is expected to ship its first inverters in H1 2022, and Lando revealed on a conference call with analysts that it’s SolarEdge’s intent that the Mexico facility caters for the majority, if not all, of demand from the US solar market.

The impacts of the Vietnam factory closure are to last throughout Q4, with SolarEdge issuing guidance that its gross margin for its solar division will fall to between 31 – 34%. Lando stressed this tightening of margins would be temporary, and told analysts during a conference call yesterday that the company had so far resisted price increases to recover its margin.

As supply chain volatility has escalated, many solar component providers have increased prices in recent quarters. PV module prices are estimated to have risen by upwards of 25% this year, while last week microinverter supplier Enphase Energy said it was planning another price rise for later this month – its third this year – to reflect higher input costs.

Despite the impact of supply chain headwinds on the solar industry globally, SolarEdge issued healthy guidance for Q4, forecasting solar revenues within a range of US$490 – 515 million. Lando stressed that it had already received orders for around 4GWac of inverters to be delivered in Q4 2021 and Q1 2022, with further orders still to come in.

1 December 2021
Join over 500 attendees at this virtual conference on 1-2 December 2021 for expert presentations covering PV Module Technology, Supply & Site Optimisation for Utility-Scale. Delegates can access streamed presentations, session recordings and chat/messaging tools to connect with fellow delegates and speakers. Speakers include leading developers, manufacturers, testing and research institutes, including: NREL, Silicon Ranch, Sonnedix, Heliene, Powertis, LONGi Solar, JinkoSolar, PVEL, Risen Energy, Seraphim, STS, Trina Solar, Eternalsun Spire, QEERI, Fraunhofer, Estuary Capital Partners, VDE, First Solar, Longroad Energy, Powertis and DNV Energy Systems

Read Next

December 1, 2021
Major US bank Wells Fargo has closed its maiden tax equity investment into a colocated solar-storage project currently under construction in New Mexico, US.
December 1, 2021
LONGi Solar has dropped its wafer prices by as much as 9.75%, its first such fall in more than a year, as signs continue to mount that industry prices are set to normalise into next year.
PV Tech Premium
November 30, 2021
Array Technologies reveals to PV Tech Premium the core motivations behind its US$652m deal to acquire STI Norland, creating what it says is the world’s biggest tracker company, from stronger supply chains to an ability to target more international markets
November 30, 2021
JinkoSolar has slashed its shipments guidance for the year, reducing its top end guidance by more than 5GW as it blamed ongoing logistics issues and port blockages.
November 30, 2021
Solar EPC company iSun is investing in US commercial PV project developer Encore Renewable Energy as part of efforts to accelerate its geographic expansion.
November 30, 2021
‘Solar Module Super League’ (SMSL) member Canadian Solar has raised US$150 million through a share offering, with proceeds set to help the manufacturer expand its energy storage arm.

Subscribe to Newsletter

Upcoming Events

Solar Media Events
December 1, 2021
Solar Media Events
February 1, 2022
London, UK
Solar Media Events
February 23, 2022
London, UK
Solar Media Events
March 23, 2022
Austin, Texas, USA
Solar Media Events
March 29, 2022
Lisbon, Portugal