(Bloomberg) -- Solar equipment maker Enphase Energy Inc. saw demand in California climb in the second quarter as the nation’s biggest market showed signs of stabilizing after state regulators slashed incentives for rooftop panels last year. The shares surged.
Sales to system installers in California rose by more than 7% compared with the first quarter and were driven by a 14% increase in batteries, Chief Executive Officer Badri Kothandaraman said during an investor call Tuesday.
“Our California business has stabilized,” Kothandaraman said, noting that more than 90% of new solar systems sold now have a battery, resulting in a 1.5 times increase in average revenue. The company reported second-quarter results Tuesday.
Enphase’s results offer a preview for the coming quarterly reports of home solar companies, including rival SolarEdge Technologies Inc. The industry has been stung by higher interest rates that have made buying panels more expensive for customers. Last week, SunPower Corp, an Enphase customer, said it would no longer support new leases and was halting shipments. Kothandaraman declined to comment when asked about sales to SunPower.
Enphase shares climbed as much as 11% Wednesday, the most intraday since May 22, and were up 9.3% at 10:17 a.m. in New York.
The company “is one of the few upstream solar stocks that is consistently profitable, generates cash, and carries a net cash position,” analysts at JPMorgan Chase & Co. led by Mark Strouse said in a research note.
California overhauled its incentives for solar-only systems to encourage homeowners to also install batteries to store power for use when electricity is more scarce and expensive.
--With assistance from Will Wade.
(Updates with comment from analyst in sixth paragraph)
©2024 Bloomberg L.P.
