Key Takeaways From Renewable Energy Conference

This week we attended the RE+ conference and trade show in Las Vegas. The conference and exhibit hall provided an opportunity to meet with companies as well as see latest product unveilings. We highlight our key takeaways below.

The near-term demand picture for solar continues to be bifurcated between the utility-scale and rooftop markets. Following a challenging 2022, utility-scale installations are seeing a strong rebound in 2023 as panel supply constraints begin to alleviate, although they are still tight by global standards. In contrast, rooftop solar demand continues to be tepid, driven by higher interest rates and California’s NEM 3.0 regulatory change. Distributors in the U.S. and Europe appear focused on reducing excess inventories, with Europe poised to normalize faster than the United States.

Could the Enphase-SolarEdge ENPH solar inverter duopoly be at risk? Among our most important takeaways from the conference was the potential for Tesla to disrupt the longstanding duopoly. In recent months, Tesla has begun shipping its solar inverters through distributors and at an attractive cost point. Ultimate success remains to be seen as Tesla is using a less sophisticated (string inverter) approach, but we view Tesla as the most credible threat in recent history to break up the solar inverter duopoly. We maintain our no-moat ratings for Enphase and SolarEdge. We view shares of Enphase as fairly valued, while SolarEdge shares are seen as undervalued with a large amount of bad news already priced in.