Enphase Energy, a company that provides distributed energy solutions, recently announced its restructuring plans. The goal is to streamline its operations and enhance cost-effectiveness, in response to challenging macroeconomic conditions and policy shifts, as well as to adapt to the evolving market landscape. According to media reports, the residential solar sector has witnessed a decline in demand in 2023, due to factors such as elevated interest rates and regulatory changes such as California’s NEM 3.0, which has affected Enphase Energy and its industry counterparts.
To address these challenges, the restructuring initiative calls for a 10% reduction in the global workforce, which will affect about 350 contractors and employees across the company. Additionally, the company will discontinue operations at manufacturing facilities in Romania and Wisconsin, reducing its overall manufacturing capacity from 11 million to 7.25 million units per quarter. However, US capacities are expected to remain unchanged.
The restructuring is projected to incur costs of approximately $16 million to $18 million, primarily in the fourth quarter. The primary aim is to optimize operational efficiency by consolidating facilities worldwide, reducing its real-estate footprint, and extending a freeze on hiring and travel through 2024.
In an exclusive interview with pv magazine USA, Raghu Belur, co-founder and chief products officer at Enphase, shared his outlook for 2024, foreseeing it as a year of recovery for the residential solar system. Belur emphasized the strong financial fundamentals of rooftop solar, storage, and electric-vehicle charging, and predicted that anticipated decreases in interest rates and rising utility costs, particularly in California, coupled with declining solar-module prices, would make these solutions more economically viable, leading to a resurgence in demand.
Enphase Energy is a global distributor of energy solutions, specializing in solar micro-inverters.