Energy
Thursday, February 8th, 2024 4:38 pm EDT
Key Points
- High interest rates have dampened demand for residential solar installations in 2023, resulting in excess inventory for companies like Enphase, a manufacturer of solar energy inverters.
- Enphase’s CEO, Badri Kothandaraman, predicts a turnaround for the company, expecting a bottom in the first quarter of the year followed by recovery in the second quarter as inventory issues are resolved.
- Kothandaraman highlights the potential positive impact of rising utility rates and falling interest rates on the solar market, emphasizing their role in long-term industry growth despite not causing immediate market shifts.
Enphase Energy anticipates a turnaround in the solar market this year despite the industry’s struggles with high interest rates. The demand for residential solar installations plummeted in 2023 due to elevated rates, leaving Enphase burdened with excess inventory. However, CEO Badri Kothandaraman projects a bottoming out in the first quarter of this year, followed by a recovery in the second quarter as the inventory backlog is resolved. Kothandaraman points to increasing utility rates and declining interest rates as factors that will support the industry’s growth trajectory in the coming months. He emphasizes that while these changes may not yield immediate results, they represent incremental steps toward long-term industry expansion. Despite Enphase’s fourth-quarter earnings and revenue missing Wall Street estimates, Kothandaraman’s optimistic outlook on the solar market has buoyed both Enphase’s stock and the broader industry. Enphase’s shares surged over 17% following Kothandaraman’s remarks, with the Invesco Solar ETF also experiencing significant gains. The positive sentiment extended to competitors like SolarEdge, Sunnova, and Sunrun, whose shares saw notable increases. However, Wall Street analysts’ reactions to Enphase’s earnings were mixed, with Bank of America expressing caution about the company’s outlook while Oppenheimer upgraded Enphase’s rating, reflecting the ongoing volatility in the solar sector.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/02/07/enphase-ceo-says-solar-industry-poised-to-rebound-on-falling-interest-rates-and-rising-utility-costs.html
