Enphase Energy, Inc. ENPH recently signed a supply deal for its microinverters with Australia-based solar energy provider, Solargain. Per the terms of the deal, Enphase microinverters will be used as the premium inverter solution for Solargain’s turnkey retail solar offerings in Australia.

Benefits of the Deal

The supply contract will enable Enphase to significantly expand its footprint in the growing Australian market. For instance, the deal will give Enphase access to supply its IQ7+ microinverters to customers who will purchase a Solargain-IKEA solar system, as a result of a prior partnership signed between the Australia-based solar provider and IKEA, a Swedish furniture giant. This may increase customers for Enphase and thereby boost its growth prospects.

Moreover, Solargain has more than 70,000 solar installations across the country. This shows the popularity that this solar provider has in Australia and thus will enable Enphase to capture a higher market share in the nation.

Enphase’s Prospects in Australia

The solar market in Australia is gaining momentum, courtesy of tumbling installation costs along with improved technology. Notably, per a report by Australia’s Department of Industry, Science, Energy and Resources, the nation registered the maximum uptake of solar energy globally with 21% of homes installing rooftop solar PV. As of May 31, 2020, more than 2.43 million rooftop solar power systems and 1.23 million solar water heaters were installed across the nation.

Being a prominent microinverter supplier in the global solar space, Enphase’s products are frequently preferred by countries across the world, and Australia is no exception. For instance, the company joined REA Global in July 2020 to combine its IQ 7+ microinverters with the latter’s proprietary high efficiency, high-density cell solar modules. This pair is projected to produce greater solar power from a smaller space for both residential and commercial customers across Australia.

The latest deal fortifies Enphase’s footprint in the rapidly-growing solar market in Australia. Considering the fact that Australia’s government has been investing amply in the nation’s solar market expansion, we expect Enphase to clinch more such deals in the coming days.  

Other Solar Players Venturing Into Australia

Realizing the prospects of the solar market in Australia, in August 2019, Canadian Solar Inc. CSIQ signed a contract for providing Operations & Maintenance (O&M) services to three local solar photovoltaic (PV) plants with an aim to minimize downtime and increase site availability.

In July 2019, JinkoSolar JKS announced the supply of its monocrystalline solar panels to its local arm Vena Energy, which is the largest renewable energy company in the Asia Pacific region.

Zacks Rank & Key Pick

The company currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

A better-ranked stock in the same space is Azure Power Global AZRE, which carries a Zacks Rank of 2 (Buy).

The company surpassed the Zacks Consensus Estimate in the last reported quarter by 130.4%. Its fiscal 2021 earnings expectation indicates a 15.8% improvement from the year-ago quarter’s reported figure.

Price Performance

Enphase’s stock has skyrocketed 135.7% in the past year, outperforming the industry’s rally of 91.6%.

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