SolarEdge Marks Milestones in U.S. Manufacturing Strategy: Achieving Targeted Inverter Production Level in Texas and Shipping First Power Optimizers from Florida

Rhea-AI Summary

SolarEdge Technologies (NASDAQ: SEDG) has achieved significant milestones in its U.S. manufacturing strategy. The company has reached a quarterly manufacturing run rate of 50,000 Home Hub Inverters at its Texas facility by Q2 2024 and shipped the first 20,000 Power Optimizers from its Florida facility. The Florida plant is expected to produce 2 million Power Optimizers per quarter when fully ramped. These milestones will create approximately 1,750 new jobs in the U.S. by the end of 2024. SolarEdge aims to produce DC optimized inverter systems for residential and commercial applications that meet domestic content guidelines, enabling customers to qualify for additional tax credits.

Positive

• Achieved quarterly manufacturing run rate of 50,000 Home Hub Inverters in Texas by Q2 2024.
• Shipped first 20,000 Power Optimizers from Florida.
• Florida facility expected to produce 2 million Power Optimizers per quarter when fully ramped.
• Creating approximately 1,750 new jobs in the U.S. by end of 2024.
• DC optimized inverter systems to meet domestic content guidelines for additional tax credits.

Negative

• None.

Financial Analyst

SolarEdge Technologies’ U.S. manufacturing strategy demonstrates a significant shift towards local production, influenced by incentives from the Inflation Reduction Act (IRA). This move is likely to improve the company’s operational efficiency and reduce reliance on international supply chains, potentially lowering logistics costs and avoiding geopolitical risks. From a financial perspective, SolarEdge’s aggressive expansion in the U.S. could significantly bolster profit margins in the long term. However, the realization of these benefits depends on the company’s ability to efficiently ramp up production and manage operational expenses.

The creation of 1,750 new jobs by the end of 2024 indicates a substantial investment in human resources, which could initially put pressure on the company’s operational expenditures. Investors should watch the quarterly earnings reports to see how these expenditures are impacting overall profitability and whether the expected tax credits from the IRA are effectively offsetting these costs.

Key takeaway: For retail investors, this U.S. manufacturing milestone suggests a positive long-term growth trajectory for SolarEdge. Still, it is important to monitor the short-term costs associated with this expansion and its impact on the bottom line.

Market Research Analyst

SolarEdge’s strategic move to manufacture locally aligns with current market trends emphasizing localization and energy independence. The shift is also likely to resonate well with U.S. consumers and businesses prioritizing domestic products. This can enhance SolarEdge's market position and brand loyalty among American customers, potentially driving up market share in the residential and commercial solar markets.

The planned production of DC optimized inverter systems meeting the Treasury's domestic content guidelines by Q4 2024 is particularly noteworthy. This initiative will help customers qualify for additional bonus tax credits, making SolarEdge’s offerings more financially attractive. Investors can expect an uptick in demand for these products as consumers and businesses seek to maximize their tax incentives.

Key takeaway: The strategy not only strengthens SolarEdge’s competitive position but also boosts customer acquisition and retention. Investors should look for increased market penetration and customer base expansion as indicators of success.

Manufacturing plans are expected to generate 1,750 new jobs in the U.S. by year end and help customers reach full Domestic Content for residential offering by Q4 2024.

MILPITAS, Calif.--(BUSINESS WIRE)-- SolarEdge Technologies, Inc. (“SolarEdge” or the “Company”) (NASDAQ: SEDG), a global leader in smart energy technology, announced today that it has reached significant milestones in the Company’s U.S. manufacturing strategy, driven by the incentives offered by the Inflation Reduction Act (IRA) of 2022.

Manufacturing and shipment milestones:

SolarEdge is now manufacturing in the U.S. through leading global electronics contract manufacturers. The first facility in Austin, Texas, opened in late 2023 and reached a quarterly manufacturing run rate of 50,000 residential Home Hub Inverters in Q2 2024. Following the opening of a second facility in Seminole, Florida, the Company has most recently shipped the first 20,000 “domestic content” Power Optimizers in Q2 2024.

When fully ramped, the Florida facility is expected to produce approximately 2 million domestic content Power Optimizer units per quarter, and has plans to begin commercial inverter and Power Optimizer production, in early 2025.

Zvi Lando, Chief Executive Officer of SolarEdge, said: “As a global company, we are proud to invest in American manufacturing and contribute to U.S. economic growth by bringing more technological expertise and jobs to American soil. Through our U.S. manufacturing strategy, we are playing a vital role in enhancing American energy independence and security by ensuring that the domestic solar industry has access to the essential and best-in-class technologies that increase power output, efficiency, and safety.”

Creating U.S. jobs:

With the approach of the 2-year anniversary of the Inflation Reduction Act and between the two manufacturing facilities in Texas and Florida, SolarEdge has already helped to create ~1,500 new jobs, with the expectation that this will increase to ~1,750 jobs across the two facilities by the end of 2024.

SolarEdge is proud to be part of the revitalization of manufacturing in the U.S., helping to advance and grow the country’s clean energy workforce.

100% domestic content products designed to help customers qualify for bonus tax credits:

The Company is also announcing its intention to produce DC optimized inverter systems for residential applications that meet the requirements of the domestic content definition currently set forth as guidelines by Treasury (as per Notice 2024-41) in Q4 2024, and for commercial applications in early 2025. This will enable such SolarEdge systems to qualify for the full 35.6% of domestic content provided by a module-level power electronic (MLPE) system and support its customers' ability to reach the required 40% domestic content threshold, in order to access additional tax credits in residential and commercial solar installations.

Bertrand Vandewiele, General Manager of SolarEdge in North America, said: “SolarEdge's commitment to meeting the U.S. market through 100% domestic manufacturing is a strategic move aligned with our Inflation Reduction Act plan. This initiative is creating thousands of new jobs, building a robust workforce, bolstering the local economy and providing substantial economic benefits to the states and cities where we operate. As a leading supplier of residential and commercial solar technology, it is important for us to provide our installation network quicker access to domestic technology, enabling a worldclass experience for our installers and their customers.”

About SolarEdge

SolarEdge is a global leader in smart energy technology. By leveraging world-class engineering capabilities and with a relentless focus on innovation, SolarEdge creates smart energy solutions that power our lives and drive future progress. SolarEdge developed an intelligent inverter solution that changed the way power is harvested and managed in photovoltaic (PV) systems. The SolarEdge DC optimized inverter seeks to maximize power generation while lowering the cost of energy produced by the PV system. Continuing to advance smart energy, SolarEdge addresses a broad range of energy market segments through its PV, storage, EV charging, batteries and grid services solutions. Visit us at: solaredge.com

View source version on businesswire.com: https://www.businesswire.com/news/home/20240711108264/en/

Press Contact

SolarEdge Technologies, Inc.

Lily Salkin, Senior Global PR Manager

Lily.salkin@solaredge.com

SolarEdge Technologies, Inc.

Dana Noyman, Head of Corporate Communications and Global PR

dana.noyman@solaredge.com

Anna Patricios, Weber Shandwick, Public Affairs Manager

apatricios@webershandwick.com

Global Government Affairs Contact

Liz Reicherts, Global Head of Government Affairs

liz.reicherts@solaredge.com

Investor Contact

JB Lowe, Head of Investor Relations

investors@solaredge.com

Source: SolarEdge Technologies, Inc.

FAQ

What milestones did SolarEdge achieve in its U.S. manufacturing strategy?

SolarEdge achieved a quarterly manufacturing run rate of 50,000 Home Hub Inverters in Texas by Q2 2024 and shipped the first 20,000 Power Optimizers from Florida.

How many jobs is SolarEdge expected to create in the U.S. by the end of 2024?

SolarEdge is expected to create approximately 1,750 new jobs in the U.S. by the end of 2024.

What is the expected production capacity of the Florida facility for Power Optimizers?

The Florida facility is expected to produce 2 million Power Optimizers per quarter when fully ramped.

How will SolarEdge's products help customers qualify for additional tax credits?

SolarEdge will produce DC optimized inverter systems that meet domestic content guidelines, enabling customers to qualify for bonus tax credits.

When will SolarEdge's Florida facility begin commercial inverter and Power Optimizer production?

SolarEdge's Florida facility is planned to begin commercial inverter and Power Optimizer production in early 2025.