Enphase Energy, Inc. (NASDAQ:ENPH) Q4 2022 Earnings Call Transcript

Badri Kothandaraman: We think you should think that NEM 3.0 is going to be great for us. We are going to be growing with €“ along with NEM 3.0, we are going to be growing. In addition, we are going to be growing outside California too, because I am not sure whether you cut the color on what I have said, the €“ we are working on the battery transition right now. The second-generation product is going to give way to the third generation. And we have fixed all of our issues in the field for the most part in terms of commissioning and all of the software performance is all in €“ is quite stable right now, and we are getting ready for the transition of the third-generation battery. The third-generation battery appointed to you on the benefits power, the 30-minute commissioning time, and modularity.

So, we think that starting in the second half of the year, we think NEM 3.0 will be a huge catalyst for this in California. In addition, we expect to also see very healthy growth outside California. Your other question, we talk to a number of installers all the time. We recently talked to a bunch of California installers on exactly this, whether are they ready, and most of them are quite optimistic about increasing their battery attach because for the first time, with the batteries, the payback will be a very good payback between 5 years and 6 years. And I think many installers, of course, are worried about the customers having to shell out a little bit more upfront. But with the ITC, 30% tax credit and with an incredible payback they think the sale will be more easier than what you think.

So, we are quite bullish about NEM 3.0 and especially our third-generation battery in that context.

Brian Lee: Alright. That’s great. Best of luck guys. I will pass it on.

Operator: The next question comes from Mark Strouse of JPMorgan. Please go ahead.

Mark Strouse: Great. Thanks very much for taking our questions. So, a lot of focus on the U.S. markets, but I just wanted to go back to your comments about Europe. So, that’s obviously been very strong in the last couple of years, kind of doubling each year. I know you don’t guide annually, but just kind of how should we think about that market in 2023? Do you think kind of an approximate doubling is kind of the base case that we should be expecting from here?

Badri Kothandaraman: Well, as you said, we do not guide something annually, but European market is growing. At least our internal reports talk about served available solar market of about 13 gigawatts in 2023. The markets to really €“ the markets that are really driving are Netherlands, Germany, Spain, France, Italy, and even actually Austria, Poland, etcetera. They are all becoming quite significant markets. In addition, attach €“ battery attach is also growing. Like what I have stated in the prior question €“ answering the prior question, the attach rate on batteries in Germany is 80%. So, solar plus storage is growing healthily. And the geopolitical situation accelerated it last year, and that’s continuing what do €“ what’s our position is.