This is your SolarWakeup for May 20th, 2020

A Changing World. Here is the long awaited data. Sales are still down 22% when compared to pre-COVID February sales. If you remove NY and MA from the analysis, sales are down only 14%. That being said, 58% of the respondents say that they are at or above pre-pandemic sales levels. 42% are hiring for sales and working capital positions are much better, many thanking PPP.

The AHJ Conundrum. 57% of survey answers say that their backlog is growing which still means that sales are going faster than installations, partly due to shelter in place orders and due to slow moving AHJs not issuing permits or doing inspections. Here’s the good news, 79% of the AHJs are doing digital permitting and 68% are providing options for virtual or video inspections. If this trend keeps up and then sticks around permanently, solar will be much better off for it.

Inverter Landscape. Public markets love the solar industry through inverter companies. Enphase exceed all-time pre-COVID highs by almost 15% today, reaching an all-time high of $70 per share. Solaredge is close to the all-time high reached just prior to COVID starting to impact the market. PV-Tech does a nice job of giving you the global view on the various players that trade publicly.

Enphase Golf Clap. A golf clap is a signal of support and congratulations when everything else is so quiet. The shot, the strategy is all happening in front of us but if you don’t pay attention you may miss it until you hear the applause.  What am I talking about? On Monday of this week, Enphase launched an online store for their products in Germany. They had already launched a store in the US in 2019, which you likely haven’t seen because the US store pricing was almost double what you pay when installers buy from distribution. The US platform most likely served as the testbed for everything syncing and working in the back end. The German store is selling product for about 15% less than the US store but with discount code system built into the platform they could be given to installers and bring pricing much closer to current levels. An online platform done right will increase the almost non-existent market share in Europe while also significantly increasing margins.

What It Means. Most manufacturers that sell into distribution don’t test this openly because what happens if distribution gets upset and stops buying from you. Enphase and a few others have the luxury position of being a product that customers want, distribution needs to sell the product in order to be a value added resource to installers. The signal, in my humble opinion, is that Enphase wants to understand the purchasing behavior better. More importantly, the company is kindly telling distribution partners that they need to be more consistent on how they price their products. The inverter index that SolarWakeup has quietly been checking, shows that the same inverter can move by $10 or $20 week by week, which is 3 to 6 cents per watt for most installers. GTM has the residential marketshare for Enphase at about a quarter of the market and Solaredge at more than double that. Look for that to flip in 2020 and 2021 in residential US market segmentation. An online store may seem small and quiet, but trust me when I say that a big and important conversation is being had behind the scenes that could reshape how the solar ecosystem functions and I love this innovation.

Listen Closely. Thanks to all that joined for yesterday’s Roth conference call about the solar market. If you enjoyed that and want to hear more about my live conversations, check out my interview with Rob Newman from Nearmaps about aerial imagery. Please forward this email to one colleague and ask them to subscribe to the newsletter, let’s get everyone in solar reading every morning. 

Opinion

Best, Yann