As we've seen with the recent solar market fortunes of, say, Suntech, SunEdison, Sharp or Yingli, very few vendors manage to hold on as market leader for long.
For now, in the fight for the solar module-level power electronics (MLPE) crown, SolarEdge's optimizers hold the lead over long-time MLPE champion Enphase, given both firm's respective performance over the past few quarters.
SolarEdge just posted its fourth profitable, record-setting-revenue quarter. The company met its guidance and beat analyst consensus on revenue and gross margin. And the Israel-based firm provided essentially flat revenue guidance for the next quarter.
Meanwhile, microinverter leader Enphase had to scale back its fourth quarter guidance to $62 million to $70 million, well below expectations. Enphase reports its fourth-quarter financials on Feb. 23.
The race is not really between SolarEdge and Enphase as much as it is against traditional string inverters. And that means that despite the added features of MLPE, pricing at both companies will need to fall. SolarEdge's ASP was $0.30 per watt for the quarter, down a few cents from the previous quarter.
SolarEdge fiscal second quarter 2016
Some growth in this quarter was driven by improved commercial sales.
- Record revenue of $124.8 million, up 8.5 percent from last quarter and 70.3 percent year-over-year
- GAAP gross margin of 30.9 percent
- GAAP net income of $24.1 million
- 416 megawatts (AC) of inverters shipped. The company shipped 356 megawatts (AC) of inverters in the previous quarter.
Guidance for the next quarter
SolarEdge's guidance for revenue and margin was above Street estimates.
- Revenue was guided to $121 million to $125 million
- Gross margin was guided to the range of 29 percent to 31 percent
New adjacent markets and radical design improvements
SolarEdge and Enphase alike are going after adjacent markets and working on radical design improvements.
SolarEdge has started shipping an energy-storage-ready system and has begun installing systems incorporating its new multi-level inverter design. The new design aims to eliminate much of the weight and cost contained in aluminum enclosures, magnetic inductors and wound copper by "emulating" higher-frequency switching without having to move to expensive, non-silicon materials like silicon carbide or gallium nitride.
Enphase has broadened its offering to include its AC battery and home energy management system. On the redesign front, Enphase is looking to scrub out 50 percent of the device's cost in two years and reach parity with string inverters at 10 cents per watt. Amongst other changes, Enphase is moving to a lighter-weight polymeric enclosure that reduces grounding requirements and allows for a greater "freedom of design."
Shares of SolarEdge jumped 7.6 percent to $29.54 on Thursday.