Enphase has expanded a production agreement with global contract manufacturer, Flex Group, to set up production in Mexico, according to a statement released. Flex will begin delivering the Mexican-manufacturerd Enphase devices to the U.S. market in the second quarter of 2019.
The company says the move is part of a plan to mitigate the effects of the impending Section 301 tariffs, which will include inverters, and other products, imported to the United States from China. And, while it did not state which products would be manufactured in Mexico, the reference to Section 301 indicates that its microinverters will be included.
Enphase did not divulge the capacity or the location of the Mexico facility, although the Flex Group operates a production center in the Mexican city of Guadalajara. It is located in the so-called “Silicon Valley” of Mexico, where most of the production of digital and electronic components is concentrated.
It will be Enphase's first facilitiy outside of China, however, with the previous agreement, signed in June 2017, seeing the Flex Group producing the company's products solely in China.
While the company's microinverters have provided clear benefits to some rooftop solar installations, and were widely used in the residential sector for several years, it has had problems competing with SolarEdge, whose products offered similar benefits at lower costs.
This existential threat led to a dramatic internal reorganization of the company, and in the last two years Enphase has shifted executives, reduced costs, cut staff and reorganized its priorities, in addition to carrying out a series of technological innovations.
This has resulted in a dramatic turnaround in company finances, with Enphase moving from heavy losses to nearly breaking even in its most recent quarterly results.