Case #1: Finance Concerns and Net Metering
The US rooftop solar industry has faced challenges recently due to rising interest rates and changes to net metering rules in California. These factors have impacted the growth prospects of the industry, as seen with the recent stock drop of Enphase Energy, a company that manufactures micro-inverters for rooftop solar panels and energy storage systems.
Enphase Energy reported weaker revenue guidance for the second quarter and lower sell-through of micro-inverters in the US, particularly in states with lower utility rates. Financing costs have also increased, making it harder for households to invest in solar systems.
California, the largest rooftop solar market, changed its net energy metering rules, which effectively reduced compensation for selling excess energy. Wood Mackenzie expects the US residential solar market to contract by 3% in 2024 due to these new rules. However, Enphase Energy believes these challenges are temporary and that California's policy change should boost its energy storage business over the long term. While it remains to be seen how the industry will navigate these challenges, the long-term promises of solar power cannot be ignored.