Panasonic (NASDAQOTH: PCRFY) and Enphase Energy (NASDAQ: ENPH) announced a partnership that will bring AC (alternating current) solar panels to the U.S. market by the summer. Enphase's micro-inverters will be attached to Panasonic's high-efficiency HIT solar panels.
The move follows an industry trend to install module-level electronics -- micro-inverters or power optimizers on each solar panel -- at the factory level. The goal is to reduce installation costs and add functionality like instant shutdown at the panel level, which regulators are starting to require.
Panasonic's solar panel play in North America
The product announcement says Panasonic will pair its N Series HIT Modules N325 and N330 with Enphase's 320 watt IQ 7X micro-inverter. The N330 module carries an efficiency of 19.7%, above the efficiency of commodity-type solar panels, while Ephase's micro-inverter has a CEC efficiency of 97.5%.
The partnership is clearly aimed at taking some of the market share SunPower (NASDAQ: SPWR) has gained with its X-Series AC modules, which carry an efficiency of 22.2% and a CEC efficiency of 96%. Panasonic is also catching up to AC products LG, JinkoSolar (NYSE: JKS), and SolarWorld have made with Enphase.
Where is Tesla?
What was missing from the announcement is arguably more important than what was in it. Panasonic is producing solar cells and modules in Tesla's (NASDAQ: TSLA) Gigafactory 2 in Buffalo, New York, potentially the largest solar manufacturing facility in the U.S. -- but the facility wasn't mentioned in the announcement. It's worth noting that it's a facility that will be tariff-free, given the Trump Administration's tariffs on solar imports. The absence of any commentare about the facility is notable.
This isn't to say that Tesla and Panasonic won't be producing AC modules in Buffalo, but I would think they would want to play up the deal if that's what was happening. Maybe they're still pursuing a strategy of staying tight-lipped about what's going on at Gigafactory 2?
Is Panasonic playing all fields?
Panasonic bringing an AC solar module to market in the U.S. makes a lot of sense given industry trends. It can help lower costs by installing module-level electronics at the factory, and regulations will soon demand these products for solar installations.
What's not clear is whether these AC modules will be imported, and therefore subject to solar tariffs, or be built at Tesla's Gigafactory 2. Panasonic has had trouble gaining traction in the U.S. market, so wherever it chooses to undertake production it needs to bring a cost-effective product to market that can compete with more efficient competition. Maybe it makes sense to broaden the potential market outside of Tesla, which doesn't seem to be interested in growing its business at all these days.
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