Enphase Energy, a provider of distributed energy solutions, recently announced its restructuring plans. As per the plan submitted to the US Securities and Exchange Commission, it is aiming to streamline its operations and enhance cost-effectiveness.
The move comes as the company navigates through challenging macroeconomic conditions and policy shifts, and seeks to adapt to the evolving market landscape.
Additionally, as per media reports, the elevated interest rates and regulatory changes such as California’s NEM 3.0, the residential solar sector has witnessed a decline in demand in 2023. This has also impacted the company along with its industry counterparts.
To address these challenges, the restructuring initiative has called for a 10 per cent reduction in the global workforce. This will affect about 350 contractors and employees across the company. Furthermore, the company will discontinue operations at manufacturing facilities in Romania and Wisconsin. Despite an overall reduction in manufacturing capacity from 11 million to 7.25 million units per quarter, 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 optimise 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, Enphase, shared his outlook for 2024, foreseeing it as a year of recovery for residential solar system (solar panels which are built on the roof of one’s house). Belur emphasised the strong financial fundamentals of rooftop solar, storage, and electric-vehicle charging. With anticipated decreases in interest rates and rising utility costs, particularly in California, coupled with declining solar-module prices, the economic viability of these solutions is poised for improvement, leading to a resurgence in demand.
Enphase Energy is a global distributor of energy solutions, specialising in solar micro-inverters.