Enphase Energy Adopts Aggressive Pricing Strategy For Microinverters
Over the past year, Enphase Energy has endured a sagging share price and market value, accompanied by laying off 7% of its staff earlier this month in a realignment. This downward spiral has prompted an aggressive pricing strategy over the next two years, stated president and CEO Paul Nahi in a November 3 Q3 presentation.
“The fourth quarter of 2015 is more challenging than expected. In order to accelerate the expansion of our business, we have adopted a more aggressive pricing strategy. However, we are confident in our ability to drive our product costs down significantly over the next 24 months, improving our competitive position.”
This year’s stock values have plummeted from a January 2 share price of $14.71 to today’s price of $1.77.
Following its quarterly meeting, Greentech Media reported Nahi boldly said Enphase would “scrub out” 50% of the device’s cost in two years and reach parity with string inverters at 10 cents per watt. This will be a daunting challenge for this micro-inverter pioneer.
Nahi has conceded the time when customers paid significant premiums for the Enphase solutions had already passed, adding that the company must also enter the larger energy market by providing complete energy systems for businesses and homeowners.
Nahi added this perspective: “Our share will continue to grow domestically and internationally.” He pointed out that Enphase would approach aggressive pricing strategy in a “surgical” fashion, adding that lower pricing would become widespread in 2016.
Nahi also pointed to these bright spots for consideration:
“In addition, we expect to drive new revenue streams from our AC Battery storage system, as well as the Enphase Home Energy Solution.”
GTM closed with this perspicacious perspective:
“Enphase has now given itself a harrowing product-development cycle and cost-reduction plan which have to get done, on time and to spec, in order to maintain the company’s market viability. Over the last decade, Enphase has executed well on its market and product strategy.
“But Enphase is now in for its biggest test in its history as a public company.”
Nobody ever said going public was an easy place to conduct business, especially when competitors are nipping at your heels.
Image via Enphase.
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