Energy-hungry Europe to brighten profit at US solar equipment makers

subscribe

NEW YORK -

Solar equipment makers are expected to post higher quarterly profit, benefiting from strong demand in Europe for critical components that convert energy from the sun into electricity.

The continent is emerging as a major market for solar firms as it looks to reduce its dependence on the Russian energy supply and accelerate its clean energy transition, brightening up businesses of companies such as Enphase Energy (ENPH.O) and SolarEdge Technologies (SEDG.O), which make solar inverters.

Wall Street expects Enphase and SolarEdge to post a combined adjusted net income of $323.8 million for the April-June quarter, a 56.7% jump from a year earlier, even as demand growth slows in the United States.

The energy crisis in Europe is not as acute as last year when Western sanctions on Russia severely crimped supplies, but prices of natural gas and electricity continue to be much higher than in the United States, Raymond James analyst Pavel Molchanov said.

As a result, demand for residential solar keeps growing at a strong pace in the region, with Germany being one of the top markets.

About 159,000 residential solar systems became operational in the first quarter in Germany, a 146% rise from a year earlier, according to BSW solar power association.

Adoption of solar is also helping European homeowners have greater control over their energy costs as fossil fuel prices tend to be more volatile, Morningstar analyst Brett Castelli said.

SolarEdge, which has a bigger exposure to Europe than Enphase, said its first-quarter revenue from the continent more than doubled compared with last year.

In comparison, growth in the United States has been tepid due to lukewarm demand in states like Texas and Arizona where cheaper electricity prices make the economics of residential solar less attractive.

Higher interest rates following the U.S. Federal Reserve's recent actions to tame inflation are also weighing on demand.

Analysts also expect weakness in California where a new metering reform reduces the money credited to rooftop solar owners for sending excess power into the grid. The sunshine state accounts for nearly a third of the U.S. residential solar market.

Enphase will report its results on Thursday after the bell, while SolarEdge will release its second-quarter numbers on Aug. 1.

Related News

france-demonstrates-role-of-nuclear-power

France Demonstrates the Role of Nuclear Power Plants

FRANCE - In recent months, France has showcased the critical role that nuclear power plants can play in an energy transition, offering valuable lessons for Germany and other countries grappling with their own energy challenges. As Europe continues to navigate its path towards a sustainable and reliable energy system, France's experience with nuclear energy underscores its potential benefits and the complexities involved in leveraging this technology effectively.

France, a long-time proponent of nuclear energy, generates about 70% of its electricity from nuclear power, making it one of the most nuclear-dependent countries in the world. This high reliance on nuclear energy…

READ MORE
puerto-rico-aftermath

After Quakes, Puerto Rico's Electricity Is Back On For Most, But Uncertainty Remains

READ MORE

pumped stprage

Hydroelectricity Under Pumped Storage Capacity

READ MORE

rachel notley

Notley announces plans to move Alberta's electricity grid to net-zero by 2035 if elected

READ MORE

The nuclear power dispute driving a wedge between France and Germany

READ MORE