Enphase Energy has posted around 50 megawatt hours of revenue with its long-promised Encharge battery in North American markets since its launch in July to meet the growing demand for energy storage from residential solar customers and lay the foundation for more comprehensive home security should arrive early next year.
Battery system sales accounted for around 10 percent of the microinverter maker’s sales of $ 178.5 million in the third quarter, CEO Badri Kothandaraman said on Tuesday’s third-quarter earnings conference call. Although it did not disclose how many batteries have shipped so far, the microinverter maker will have production capacity for 50 megawatt hour charging systems by the fourth quarter of 2020, and “we are mostly booked for it,” orders he said.
It is a remarkable debut for a product that is seen as a crucial step in Enphase’s plans to expand its reach beyond its core microinverter product to broader household energy management. In important US markets, solar systems for private households are increasingly being equipped with batteries. Competitors like Tesla, LG Chem, Sunrun and Generac are battling for market share with a combination of price points, ease of installation and energy management features for homes.
Enphase is a relative delay in this competition in North America as Encharge’s launch has been postponed from an initial target date in late 2019. The new batteries differ from those they have sold to customers in Australia, New Zealand and certain European markets in that they are part of an integrated system that includes batteries, inverters, associated switchgear and controls, and connectivity to the Enlighten cloud of the company combined. based solar monitoring platform.
Charging systems are supplied in units of 3.36 kilowatt hours or in a configuration with three units and 10 kWh and use lithium-ion batteries from the Chinese manufacturer A123. Enphase recently added China’s CATL as the second battery maker and is currently in talks with a third unnamed supplier, Kothandaraman said. 480 MWh of production capacity per year should be available by mid-2021, he said.
The critical California solar market
In addition to storing and relocating solar power to optimize the value against the net measurement rates during the useful life or to comply with export-restricted regulations in various states, batteries are in demand for Californian customers who need backup power in the last two years in order to survive fire protection failures.
The focus is on solar storage systems with energy control, which can be used to direct the battery power to various household loads in order to avoid critical circuits having to be hard-wired or the risk that the batteries of the entire house can be prematurely empty in the event of failures for up to hours Take days.
“At the moment our product does not have this feature,” said Kothandaraman. Customers have to manually choose which household loads to keep in case of failure. Enphase hopes that its IQ8 microinverter, which it has dubbed the “first off-grid microinverter”, will help solve this problem when it becomes available later next year.
IQ8 will integrate the company’s Ensemble home energy control software to provide an “extensible architecture with load control” through smart switches for specific circuits or devices, or to add generators or fuel cells, and eventually EV chargers. The company also plans to release an IQ8D dual inverter for commercial three-phase power applications.
Enphase has worked with the more than 2,000 solar installers on its network to deliver the Encharge system to date, but is also in discussions with unnamed Level 1 and 2 solar installers who are interested in the product, Kothandaraman said. The company is also working on “multiple ways” to use its batteries for network services, as companies like Sunrun and Tesla do, although it refused to provide any further details on how or when it would happen.
Revenue for the Fremont, California-based company increased 45 percent in the third quarter from the previous quarter, but declined slightly from the year-ago quarter. The third quarter profit of $ 41.8 million surpassed the second quarter profit of $ 23.5 million hit by the COVID-19 pandemic and also exceeded the third quarter 2019 profit of 39.5 US $ million on a non-GAAP basis.
Sales of Enphase’s core microinverter products also continued to grow in North America, Europe, Australia and Latin America. Non-GAAP gross margins, which measure sales minus the cost of sales, rose to a record 41 percent 39.6 percent in the second quarter and 36.2 percent in the third quarter of 2019. The company forecast one in the fourth quarter Revenue ranged from $ 245 to 260 million and non-GAAP gross margins ranged from 38 to 41 percent.
Enphase has been fighting for market share in the residential solar inverter market with SolarEdge of Israel, which had a market share of around 60 percent in the first nine months of 2019, compared to around 20 percent for Enphase, according to Wood Mackenzie US PV Leaderboard .
“I believe we will continue to get involved in microinverters,” said Kothandaraman, but declined to provide concrete figures on the competitiveness of SolarEdge, which is expected to release third quarter results next week.