Enjoy $0.11/W tax credit! Enphase plans to build six new production lines in the United States

US microinverter maker Enphase plans to build four to six new production lines in the United States by mid-2023 as the company looks to take advantage of manufacturing capacity tax credits included in the Inflation Reduction Act (IRA).

The announcement was made as part of the California company's third-quarter financial results, which also showed that Enphase shipped more than 4.3 million inverters (1.7GW) and achieved record quarterly revenue of $634.7 million, up 20% from the second quarter. Among them, European revenue increased by 70%. The company's GAAP gross margin was 42.2% and GAAP operating income was $135.4 million.

Enphase president and CEO Badri Kothandaraman said that while he cautioned that there were still many legal uncertainties surrounding the IRA, as PV Tech previously reported, the company was “actively considering manufacturing in the US” given the IRA’s support system.

“Once the details of the IRA are finalized and the implementation is clear, the U.S. manufacturing sector could see substantial benefits in terms of the capacity tax credit,” Kothandaraman said on a call with analysts.

The IRA provides a capacity tax credit of $0.11/W for microinverters produced domestically in the United States, and Enphase plans to use this policy to open six new production lines in the country.

"We are planning to open four to six production lines in the U.S. in the second half of 2023. The idea is that given the rapid growth of the company globally, we will need new capacity anyway," Kothandaraman said, adding that the company is "working with three contract manufacturing partners, one new and two that we already have."

Due to the energy crisis in Europe, more and more people are turning their attention to household photovoltaics, and in many cases using battery storage. As a result, the demand for Enphase products for self-use in Europe has surged.

As a result, the company aims to achieve faster growth with strong tailwinds in the European market, while also working to leverage the experience of European partner companies to drive growth throughout the United States.

Looking ahead, Enphase expects fourth-quarter revenue to be between $680 million and $720 million, including 120MWh-135MWh of Enphase IQ battery shipments. The company's GAAP gross margin is expected to be between 39.0% and 42.0%, and operating expenses are expected to be between $152 million and $156 million.