Enphase (ENPH), EKD Ink Deal to Expand Supply in Germany
Enphase Energy, Inc. ENPH recently teamed up with Germany-based solar service provider Energiekonzepte Deutschland GmbH (EKD) to distribute its IQ Batteries in the nation. This highlights yet another effort on Enphase’s part to steadily expand its partnership network in Europe, following last month’s expanded distribution partnership with BayWa r.e.
Enphase’s Expansion in Germany
The solar market in Germany has been rapidly expanding lately. As stated in a report by Bloomberg, this June, the nation’s output reached 36,848 megawatts according to data from the European Energy Exchange AG, which surpassed the previous record of 36,303MW as of Apr 27, 2021. Germany added about 5.3 gigawatts of solar power capacity in 2021, 10% more than the year before, according to the solar industry association.
Surely such a booming solar market has set the stage for solar companies like Enphase to reap the benefits of this expanding market space by enhancing its distribution network. The latest partnership with EKD is a bright example of that. The fact that EKD has more than 70 partners in its network and 1,600 sales consultants across Germany should significantly boost the distribution of Enphase’s products in the nation.
Prior to this announcement, the company revealed its plans to acquire Munich-based GreenCom Networks, a provider of Internet of Things (IoT) software solutions for customers to connect and manage a wide range of distributed energy devices within the home. Surely such efforts, including the latest one with EKD, should ramp up Enphase’s business in Germany, thereby boosting its revenues.
Europe’s Solar Market Boom
With the entire world moving toward a carbon-free environment, Europe’s solar market is poised to grow significantly. Per a report from Solar Power Europe, the European Union may witness growth of 18%-20% during the 2022-2025 period.
The expanding market size of Europe’s solar market indicates sizable opportunities for ENPH and other solar players. Solar majors that have already carved out a position in Europe’s solar market are Canadian Solar CSIQ, ReneSola SOL and SolarEdge Technologies SEDG.
In March 2022, Canadian Solar became the largest solar developer in Italy based on contracted volumes after it signed two 10-year power purchase agreements with Axpo Italia for the purchase of 70% of the energy produced by two solar power plants under development, totaling 84 megawatt-peak.
The Zacks Consensus Estimate for Canadian Solar’s 2022 sales suggests growth of 46% from the prior-year reported figure. CSIQ boasts a four-quarter earnings surprise of 127.73%.
ReneSola enjoys a strong presence in Europe, with a leading market share in Poland and Hungary. The company signed a strategic partnership agreement with Emeren, a London, U.K.-based project developer specializing in the development of renewable energy power plants in Europe and other international markets. Both companies aim to develop projects in a broad range of sizes across Italy, with a target of reaching 110 MW shovel-ready projects by 2022.
The Zacks Consensus Estimate for ReneSola’s 2022 earnings suggests growth of 34.2% from the prior-year reported figure.
SolarEdge has a strong footprint in 14 European countries, including the Netherlands, Italy, Poland, Spain, Switzerland and the United Kingdom. Considering SolarEdge’s current portfolio and new products, which the company plans to release in the coming quarters, the company may continue to witness strong growth momentum in Europe, buoyed by elevated electricity prices in Europe and a supportive government.
SolarEdge boasts a long-term earnings growth rate of 29.1%. The Zacks Consensus Estimate for SEDG’s 2022 sales implies growth of 17.7% from the prior-year reported figure.
Price Movement
In the past year, shares of Enphase Energy have rallied 52% against the industry’s decline of 13.4%.
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Zacks Rank
Enphase Energy currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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