"1st order of busines for the new CEO - sell the battery business and cut R&D related to batteries."
That horse has long since left the barn. The storage side R&D is basically over with....all 100M of it.
The money being spent on R&D today is focused on cost reduction of their microinverters.
The battery storage tech was also developed to compliment the rest of ENPH's "energy management system".
At this point it would only have value to a company buying the entire company.
Nahi thinks that in a few years every system using ENPH microinverters will have a storage side to it.
At the moment that 100M spent is generating zero in revenues. But be patient. They've been working on putting the product together for four years and it will just hit the first market starting next quarter.
Now maybe it will be a dud. But maybe not.
But residential solar storage is going to rapidly become a multi-billion dollar industry (which is why everyone is jumping into it). Even if ENPH strikes out (I doubt it...but maybe) they won't be any worse off going forward because of it. It's not like the share price is reflecting some huge anticipation of growth from their storage line. Rather...it looks to me like it being a dud is already priced in (1/10th that of it's main competitor).
Other companies may follow ENPH's lead, but I have yet to hear of one that collects the amount of data every single day ENPH does (850 Gbs and growing) . I have also yet to hear of a single one do what ENPH did in Hawaii last year.
The central role of data in a complete energy system of the type offered by Enphase and others – solar, storage, inverter (or micro-inverters) and a software-defined control and management system – means the solar industry could be well-positioned too.
“Data as it relates to renewables – it is one tool to help in the integration of DG with the grid itself. The grid was not designed for this. Now for the first time, not only do we have generation occurring at the end nodes, in the distribution and transmission lines, but generation is now heading back into the grid,” Paul Nahi, Enphase’s CEO, says.
“The ability for renewables to actually add to grid stability is what I think is being missed by most individuals.”
We know more about what’s happening inside the network than even the utilities know. They don’t have access to this data
Nahi says the usefulness of data collected by micro-inverters and other parts of a solar energy system at all scales could help smash a common perception that adding diverse distributed generation resources means losing visibility of what is going on in the network, versus a few centrally located, centrally dispatched assets like coal and nuclear.
“The reality is that now, with those solar assets out there, we can leverage those assets to monitor the grid. Remember, in most cases we know more about what’s happening inside the network, in the distribution and transmission lines than even the utilities know. They don’t have access to this data.”
Here is bit of another article:
"“What we did in Hawaii, the first thing we did is we showed them [Hawaiian Electric] what’s going on in their networks. It was a visibility that they did not have prior to that. The inverter itself is capable of providing data on the DC side, the panel side, of the inverter itself as well as the AC side, so I know exactly what’s happening with the grid, I can pick out particular waveforms, I can do a lot just in terms of visibility.
“So we were able to show Hawaiian Electric where the challenging spots were and where it wasn’t so challenging. They were able to open up a queue in the areas where it wasn’t so challenging, and in the areas where there were more issues – obviously with a lot of work with Hawaiian Electric – we were able to issue a command, with the proverbial push of a button, I would say almost literally a push of a button from our corporate offices, we were able to upgrade about 800,000 of our inverters to a new grid profile to help stabilise the grid.”
As the utility later said, the Enphase project saved Hawaiian Electric a substantial sum of money, thought to be in the tens of millions of dollars, over what it would have cost to physically visit each site, assess and upgrade the inverters.
Enphase has been evangelical about its devotion to data collection for some time. Nahi’s colleague and co-founder of the company, Raghu Belur, told PV Tech at the PV Expo show back in February that Enphase is constantly looking to use the vast amounts of data it collects through its installations in a number of ways to manage energy systems.
“We collect 850 Gbs of data per day, almost a terabyte of data per day on 250,000 systems in 80 countries. We have an incredible amount of intelligence out deep in the network that now we’re starting to leverage,” Belur said.
India is going to become the largest market in the world for solar in a very short time. I suspect ENPH will have a much easier time selling here since again there are no SCTY headwinds.
Since SEDG has declining growth internationally (where they is zero benefit from SCTY), I suspect they'll concentrate their resources on the US market.
As you know, SEDG had only 1.7% of the US market (with year over year flat revenues) until SCTY pushed them out of the minor leagues. On an international and country by country basis I wouldn't expect them to fair any better. Their declining international revenue may be a sign they are not even trying to compete.
"IEEFA’s report, however, anticipates a China-like solar expansion in India, with the next five years characterized by accelerating growth that will echo China’s meteoric rise of 1 GW in 2010 to close to 33 GW at the end of 2014, says Bloomberg New Energy Finance (BNEF).
"India is replicating Germany’s and China’s systematic electricity sector transformation, with the added advantage that the cost effectiveness of this is accentuated by the fact that the price of solar electricity has dropped by 80% in five years," said IEEFA director of energy finance studies, Tim Buckley.
The wider energy goal of the Indian government is to ringfence the country’s energy security, and Prime Minister Narendra Modi has targeted renewable energy as the most likely route to energy independence. The goal is to hit 175 GW of solar PV, wind, and biomass generation by 2022, and the country has earmarked around $200 billion in investment required."
Anything that will increase solar usage is good news for ENPH since by 2018 their microinverters will be dominating the solar landscape.
It's the just the way tech works.
String inverters will simply not be able to compete when you can add a microinverter that will outlast the panel at factory level and it costs 30% less.
Enphase's microinverters and battery can be set up to be used as back up power. It's not an issue for me, and clearly not a market ENPH is going after, but if someone wanted to go through the extra steps it certainly can be done.
"AC Coupling allows use of Enphase Microinverters with off-grid and battery-based photovoltaic systems. These applications require a battery-based inverter to create a “micro grid” that the microinverters can then be connected to. This is generally referred to as AC coupling because the Enphase Microinverters and the battery-based inverters are “coupled” on their AC outputs.
While these systems are more complicated than traditional grid interconnected systems, they can provide power during power outages, in emergency situations, and to remote locations. Enphase Microinverters, when AC coupled to a battery-based inverter system, offer advantages over other inverter technologies. This is because a microinverter system is divided into branch circuits to provide a tapered charge to the batteries. Offering more flexibility than string inverters, Enphase Microinverter systems can be AC coupled to a battery-based inverter system after installation, and the production capacity and critical loads can be increased or reconfigured to fit storage needs. Enphase Microinverters also offer the design flexibility, increased safety, and increased performance that come with modulelevel maximum power point tracking and monitoring."
I've just never heard this from any other company...or the Hawaii experience. I'm thinking ENPH does have a serious advantage that's yet to be monetized.
"“We collect 850 Gbs of data per day, almost a terabyte of data per day on 250,000 systems in 80 countries. We have an incredible amount of intelligence out deep in the network that now we’re starting to leverage,” Belur said"
As for India and M215's...aren't they like most like some European markets (Germany) where the new "S" inverter is required? I don't know for sure...but until that model was released the sales in India were zero.
It's also pretty cool you can see exactly in India where the sales are occurring. Right now it's centered in one specific area of Sir Lanka. My guess is Enphase set up shop there with one installer and he's going to down.
The beauty of this is if one tiny area can have that much action that quick after setting up shop what will growth in the other areas look like going forward?
If India really is going to become the largest market for solar in a very short time I'd say Enphase is hitting the ground running.
It will be interesting on their next C.C. as to how the international markets are playing out. My guess is the trend will continue where ENPH is showing growth and SEDG declining.
"1. They are not making money selling microinverters after 10 years."
Really, so where did the 100M they spend developing new products (storage) yet to hit the market come from?
"2. A newer architecture has been developed that splits the functions between the roof and the wall and that is so far selling much better."
What we know is SEDG had 1.7% of the market until SCTY pushed them hard (450M per year in marketing). Some have bought into the misconception SEDG's dramatic growth the last couple years is related to their superior tech when it was really just simple marketing.
"3. The initial reviews of the battery are more negative than positive."
They are not even on the market yet....reviews I've read are good.
"4. Management has put the company in a very high risk financial position"
Don't be stupid. They have over 100M in working capital available to them and their new product line has not even hit the market yet.
"Instead of talking about a nebulous concept, what exactly is the advantage that Enphase data has over other sources that will help Enphase revenues?"
Glad you asked, but if you doing your research instead of posting nonsense here all day you'd know that question was asked by an analyst during the C.C. a few weeks back.
Notice how they state they "monetized" this feature for the first time...new future revenue stream?
This also leads uninformed investors with misconceptions. For instance, if all they do is compare ENPH's price per watt to SEDG's price per watt you may think the numbers are standing pat when in reality they are moving rapidly together.
"Right. It is a great question. We have long been a proponent of leveraging the solar systems out there as grid assets, and leveraging that for both increased visibility on the grid as well as more and more control and stability. To our point, our relationship with Hawaiian Electric has proven to be very beneficial, I think, to both parties, and it did represent the first time we've been able to monetize those features.
We just recently presented at DistribuTECH, and the result there was probably just short of overwhelming. We are now engaged with multiple utilities all across the US in many different ways. Whether it is to help in terms of grid stabilization, whether it's to work with them on the rollout of solar programs in their regions, the solar systems there will also act as resources for the grid to help stabilize the grid. So there's a tremendous amount of work going on within groups inside of Enphase to accelerate that.
The only challenge there is that utilities by definition tend to move a little bit slower. So I think that in terms of materiality, we're looking at probably 2017, but there's a tremendous amount of work going on today, and we are going to be in trials with multiple utilities across the US, both for storage as well as solar as assets and as controllable assets on the grid this year."
I was speaking about SEDG's 10% decline in international REVENUES vs ENPH's 4% sequential increase.
I've posted the link before...just not curious enough to dig since SEDG makes it hard to find.
I just read it from an analyst that spoke with their CEO....always easier when the CEO answers the your phone call.
I wish someone would ask them about their optimizer failure rate vs string inverter.
Once SEDG gets near 28 I'll go look it up again...because I'll have a short vested interest at that time.
"I have only one question to you: how come such a seasoned investor gets his ONLY information from quotes of executives of a company he is investing in, from the website and application notes of the same company and from distributors that are selling exclusively products of the very same company? I just wonder, do you really believe the due diligence you are doing is unbiased and makes a good service to you? I really do not care, just curious."
What are talking about? I've leaned lots from you:).
But I stick with what works for me.....
And you'd be very mistaken if you think those are my only sources.
Your mistake is thinking the share price is telling you everything you need to know about the company.
Sometimes it is....as in SUNE....but sometimes the markets have a serious disconnect.
But if this was easy everyone would be rich...including Beans.
It's also why I don't get frustrated when the share price tanks. I don't really care about the share price today....I care about the business trends. What I've leaned a million times over is the share price will ALWAYS TAKE CARE OF ITSELF if the underlying trends remain in tact. The key to wealth is identifying those trends before it becomes obvious to the markets.
It's not in their transcript...it was in an analyst's note after the call.
It's kind of secret SEDG would rather not publicize.
I posted the quote here at the time before running with it ever since.
Kind of like the 1.7% number.
It's just part of digging.
Would I lie to you?
If you're really determined just check my posts since the C.C....it's there.
Maybe later tonight I'll get motivated to look for it. Right now I have to pack for my two month trip (just in case you wonder why I stopped posting again).
I'll be coming near to your country....I guess that's supposed to be secret also though.
BTW....my confidence and research techniques come from experience. I've been through this before (a few times actually). A few years back I bought a stock initially for about 1 dollar and it dropped to 10 cents (where I bought a boat load). Many called me crazy (way worse things then others here as the share price tanked.....but I just posted where my research led me.
I ended up selling most of my shares for 10 dollars a couple years later.....and changed my alias as I don't need or want anyone following me around (I still have the alias though).
The time before that I started buying one for around 5 on it's way to 1....I sold most of those for around 50 (still have that alias, too).
I'm still friends with both CEO's...but I have never spoken to Nahi (but he seems like a nice guy). I'll probably call him next year when the trends start to become more obvious to the market
Anyway, I don't post here for me....I post here for guys like Beans that have no clue how to make money investing. It's OK if he passes, as it's OK to me if everybody passes.
Because like I said...the share price will take care of itself if the trends remain intact (as I expect).
So after I'm right here, please don't follow me around.
However, if I am wrong I will keep this alias active. I also like for posters to remind me when I make mistakes. It keeps one humble:).
"Don't be stupid? They say that they have $48.9M in working capital, so how do you come up with $100M in working capital?
Maybe you should call Kris and let him know.
Did you know they owe Wells Fargo $17M and they lost over $15M last Q alone? "
Lots of investors, even some of those yapping on Seeking Alpha (like that ener tuition guy), don't know how to read a balance sheet.
His conclusion was the same as your's....ENPH will need to massively dilute to survive within just a quarter or two.
Of course, he was also using that same stupid logic pumping SUNE at 10 dollars because of the strength of their balance sheet (one billion in cash).
So...what's the real story?
You can look up GAAP working capital...it's different then what I use. I use real world money.
For SUNE, that billion dollars was all manipulated (as were their other assets) and they had huge debts coming due. I could go into the details...suffice to say SUNE will declare BK VERY soon (also at that time if TERP drops down to it's 52 week low load up on it).
But as for ENPH:
They owe about 17M with a line of credit of 75M. That's about 60M right there. Then add in what historically they have for inventory (still bloated but only 6 weeks old so legit) and you can add another 20M.
Add in their cash to that 28M....giving you more than 100M.
Which is why they are still comfortable keeping their R&D expenses so high....50M for ENPH 2015 and 22M for SEDG 2015.
And more than enough time to see the trends I expect to start to play out (starting Q2).
I posted this link when I made the original statement but wasn't able to dig it up when others accused me of making numbers up.
The number cannot be found on SEDG's 10Q so I'm pretty sure the Needham analyst (Mok) got his info from a phone call.
"International revenue fell 10% from the previous quarter....."
If you Google............."Tesla Partner Solaredge Joins Sun power, Solarcity in storage game scalper1"........you should find it.
Its ironic the story pumps SEDG. Clearly the analyst does not understand the significance of his find.....SEDG success is directly tied to SCTY's marketing budget and not their superior products.
Also...ENPH, contrary to that AUS solar telemarketer, has been doing very well In AUS. They've increased market share from zero to 8% in two years.
Last I read ENPH was 8% but growing rapidly and taking market share..... just not sure where you got 14% number from.
I did not consider for even a second that prior string customers would purchase ENPH batteries.... but now that you mention it I think it makes perfect sense.
By the same token I would expect many disgruntled string customers would also migrate to micro inverters as their antique string inverters start to fail in large numbers and microinverters continue to drop in price.
As for SMA....it will be interesting to see how they do in competition with SEDG now that they are moving into the optimizer business. ENPH already handed them their lunch on the microinverter front.... which will come to dominate the market in two years anyway regardless of how the SMA/SEDG battle plays out.
Yup, any company with a bi directional micro inverter can do exactly what enphase is doing.
Of course, finding one might be a problem since enphase is the only company marketing them.
Anyone else notice SEDG replaced 25 pounds of magnets with 6X the number of switches and capacitors in their new HD inverter? Since high voltage switches tend to fail a bit more than a basic magnet I'm going to guess their warranty costs are about to explode.
The question is will it drop 80% like ENPH did when their warranty obligations rose rapidly because of the initial problems with the M190's.
As usual you missed my point.
No other company will be able to market module batteries that can be exactly fit to the individual needs
Of the customer.
If you want to start small and scale up as prices drop then enphase is
Your only option.
As for solar bridge micro inverters.....enphase already outsold them about 100 to 1.
As for earnings....I expect ENPH to guide sequentially higher percentage wise than SEDG.
As for Beans....I wonder when SEDG drops 80% over the course of the next year, like ENPH did when he invested, if he'll be equally as prolific posting nonsense on their board
AUS consumer laws require installers to back the warranty.
Installers pushed enphase for 10 years....enphase compiled.
As a result enphase is growing rapidly in AUS.....15% market share according to some.
SEDG stuck with their US warranty.
If SEDG sells anything in AUS it's a secret because I can't find it mentioned anywhere.
As has been the case in the past....I once again expect ENPH warranty obligations to drop this
Quarter while SEDG's will continue their rapid climb.
Meaning they will probably move to over 4x enphase on a trailing 4 quarter basis.
Hopefully on their conference call a sharp analyst will ask just what percentage of that exploding number is related to Optimizers?
In 2012 SEDG had all of 75M in total revenue and followed that up with a flat 78M for 2013.......before SCTY pushed them up.
SEDG has been selling in AUS since 2010, three years before ENPH entered, and has only a "Few thousand" installs to show for it.
My guess is their Optimizers have a high failure rate In heat....but really do not know the exact reason for their low sales.
Once SCTY dumps them for micrinverters I expect similar results in the US.
If not heat, what do you attribute SEDG'S high failure rate to....considering their warranty obligations are 360% higher than ENPH and growing rapidly?
Both companies pay for labor, ENPH just pays through the 3rd party installer.
Both companies had nearly identical revenue in 2015 yet SEDG had nearly 4x the warranty obligations.
So again, why do you suppose SEDG has such a high failure rate compared to ENPH?