Enphase Energy Inc., the California-based solar-technology company, is targeting $10 million to $20 million in sales of energy-storage systems this year largely in its first markets, Australia and New Zealand, as it takes on competitors including Tesla Motors Inc.
Enphase expects home storage products to start generating revenue in those two countries in the second half of 2016 before introducing the technology in Hawaii and then turning to Europe in 2017, Chief Financial Officer Kris Sennesael said in a phone interview on Monday. The company expects sales of as many as 4,000 systems this year, he said, as the global roll out of the technology for power storage gathers pace.
“There are multiple competitors out there trying to get to the market in a similar time frame as us,” he said. “Early indicators are showing a tremendous amount of interest for storage solutions.”
Tesla, LG Chem Ltd. and Panasonic Corp. are among companies jumping into an Australian storage market that Morgan Stanley estimates could be worth A$24 billion ($18 billion) after a surge in solar power production. Australia’s residential and commercial energy storage additions are expected to double each year from 2016 to 2018 as an “intense competitive environment” emerges, according to IHS Inc.
About 30,000 Australian homes will have PV-energy storage systems by 2018, Marianne Boust, a Paris-based analyst at IHS, wrote in a report last month. Potential changes in regulation or the structure of retail prices are among the risks for the industry, she wrote in an e-mail response to questions.
Enphase, which this week opened a new research and development facility in Christchurch, New Zealand, has said it’s offering a product that combines solar power, storage and energy management technologies.
Enphase is cutting costs to regain market share lost to companies like SolarEdge Technologies Inc., which offers a cheaper competing product. Enphase, a maker of inverters that convert the direct current electricity that flows from solar panels into alternating current that’s sent across the grid, said last month that it expects gross margins in the current quarter to slip to as low as 18 percent from 23.9 percent in the fourth quarter.
While the decline in margins is “painful,” the company’s “more aggressive pricing strategy is working,” Sennesael said. “We hope and believe that Q1 is somewhat the bottom of the gross margin story, and that from now on we will see some modest and gradual improvements.
©2016 Bloomberg News
Lead image: Rooftop solar panels in Sydney, Australia. Credit: Shutterstock.