10 Best Alternative Energy Stocks To Buy According to Hedge Funds

6. Enphase Energy, Inc. (NASDAQ:ENPH)  

Number of Hedge Fund Holders: 42  

Enphase Energy, Inc. (NASDAQ:ENPH) is a global energy technology company that specializes in solar microinverters, energy storage solutions, and energy management devices. Enphase Energy, Inc.’s (NASDAQ:ENPH) microinverters convert direct current (DC) from solar panels into alternating current (AC) for use and are critical for optimizing solar energy systems, enhancing efficiency, and reliability, and are also easy to install. The company is a market leader in residential solar in the U.S. Europe and emerging markets in Asia.

In Q3, Enphase Energy, Inc. (NASDAQ:ENPH) reported $380.9 million in revenue, shipped around 1.73 million microinverters and 172.9 megawatt hours of IQ batteries, and generated $161.6 million in free cash flow. The company’s gross margin for Q3 with net Inflation Reduction Act (IRA) benefits was 48.1%. The company is strategically well-positioned to benefit from the U.S. Inflation Reduction Act (IRA) as its microinverters can help customers qualify for a 10% Investment Tax Credit (ITC), which translates to savings of about $0.40 per watt, under the Domestic Content Bonus Credit provisions of the Inflation Reduction Act. This advantage is expected to help the company achieve higher sales and enhance gross margins. In Q4, Enphase Energy, Inc. (NASDAQ:ENPH) aims for revenue to be within a range of $360.0 million to $400.0 million, ship 1.3 million microinverter units from its US facilities and 140 to 160-megawatt hours of IQ Batteries.

California is a major market driven by NEM 3.0, or the net billing tariff, which reduces compensation for solar-only customers to encourage installed battery storage, which has increased the demand for Enphase Energy, Inc.’s (NASDAQ:ENPH) battery storage systems. In Q3, the company reported a 13% growth compared to the previous quarter, with distributor sell-through and high battery attach rates of nearly 50%. In non-California states, distributor sell-through was up by 14% quarter-over-quarter. Enphase Energy, Inc. (NASDAQ:ENPH) is also expected to drive growth in international markets, particularly in high-growth markets such as Brazil, India, Vietnam, and the Philippines.