As the use of module-level power electronics to accompany solar PV continues to grow in popularity, leading companies are seeing results on their balance sheets.
SolarEdge is one of the largest companies in this space, with quarterly revenues growing 72% year-over-year to reach a record US$115 million. SolarEdge follows a novel financial calendar, and its first quarter of fiscal year 2016 ended on September 30.
The company also achieved an enviable 13% operating margin, and $14.4 million in net income. SolarEdge notes that it was able to out-perform falling average selling prices, which it attributes in part to a different product mix and the fall of the Euro versus the dollar.
Founder, Chairman and CEO Guy Sella estimates that the company will bring down costs 7.5-10% over the full fiscal year 2016 by following its cost reduction plan. The company has identified this as important for growing market share.
SolarEdge's primary market remains the United States, and of the 356 MW of inverters the company shipped during the quarter, 232 MW were destined for the nation. The company also reports its first orders from NRG Home Solar during the quarter.
SolarEdge also notes that it increased its market share in Germany, and identified the UK, Italy, and France as significant markets. The company expects its UK business to be another casualty of feed-in tariff cuts in 2016.
As for markets outside the United States, SolarEdge says that it is in final process of getting approval to sell its three-phase inverters in Japan.
In addition to inverters, SolarEdge shipped 1.46 million power optimizers during the quarter. In terms of dollar value, the company tends to have a roughly 50-50 share of inverters and power optimizers.
During Q3 SolarEdge unveiled its HD Wave technology, which it says represents a breakthrough in inverter architecture, offering higher efficiencies with dramatically reduced weight and raw materials.
SolarEdge has developed this technology for single-phase inverters, and says that it is working on HD Wave three-phase designs. The company expects to ship few of the HD Wave inverters in the current quarter, but to ramp shipments to 80-90% within the next three quarters.
SolarEdge offered a rosy outlook for coming quarters, predicting a slight increase in income and similar gross margins in its second fiscal quarter. The company says that it expects the U.S. market to be particularly strong in 2016, due to an anticipated pull-in effect from the pending expiration of the investment tax credit at the end of the year. SolarEdge also predicts an increased share of the U.S. market for distributed solar.
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