SolarEdge Shedding Staff – Again

2024 keeps getting tougher for Israel-headquartered solar manufacturer SolarEdge, with hundreds more staff to be shown the door.

Founded in 2006, SolarEdge produces solar panel optimizers, inverters, home batteries and EV chargers. The company’s main claim to fame was being the first to successfully commercialise power optimizers; a type of Module Level Power Electronics (MLPE) device. Not to be confused with microinverters, power optimizers don’t replace an inverter but work with it; maximizing energy harvesting.

Like many companies riding the solar coaster, SolarEdge has seen its share of ups and downs; but this year been particularly brutal. The firm says a downturn at the end of last year and beginning of 2024 led to an accumulation of excess inventory in its distribution channels; particularly in Europe.

In late January this year, the company announced a restructuring plan that included approximately 900 employees, or 16% of its workforce, being laid off – around 500 of those in manufacturing. This followed discontinuation of manufacturing in Mexico and scaling back of manufacturing capacity in China.

According to the firm’s financial results for the first quarter ended March 31, 2024, revenues from the company’s solar segment were USD $190.1 million, down 79% from $908.5 million during Q1, 2023. Compared to Q1, 2023, shipments in the first quarter of this year were pretty dismal:

• Optimizers (units): down ~83%
• Inverters (units): down ~79%
• Batteries (MWh): down ~42%

Second quarter results are yet to be released, but SolarEdge has previously estimated revenues from its solar segment to be within the range of $225 million to $255 million during Q2. However, since then was news in June that a customer had filed for bankruptcy and SolarEdge may wear an $11.4 million loss. Whether that revenue was expected in Q2 isn’t clear.

Hundreds More Layoffs Announced

In a letter earlier this week, SolarEdge CEO Zvi Lando delivered more bad news for staff concerning the hard road head.

“The most significant and painful measure is a reduction in our workforce, which will impact approximately 400 employees, of which 200 are in Israel,” he wrote. “The action is being taken across all departments, and includes a reduction in both headcount and discretionary spending.”

Acknowledging the impact this would have on affected employees, Mr. Lando said it was why the company “preferred to be more cautious in the initial reduction in force earlier this year.”

Stock Market Punishment

We mentioned back in May that SolarEdge shares were trading at USD $49.47 at the time, which was the lowest for at least 5 years and around 86% down from a high of ~$365 in late 2021. Share value has continued to head south, closing at $28.11 yesterday. But this was up on the lowest this year – $25.05 in early July.

Moving Past The Carnage

Mr. Lando said the company will be focusing on:

• Increasing customer satisfaction.
• Delivering next generations of existing products.
• Expanding into new market segments such as ground mount and small-scale utility solar, commercial batteries and trackers.
• Controlled spending and increased efficiencies.

“Our team has extensive industry experience, and we understand that our market is volatile and cyclical. I believe, that in the not-too-distant future, demand for renewable energy worldwide will rise more rapidly,” he stated. “The SolarEdge strategy, vision and mission, therefore, remain unchanged.”

Solar Swings And Roundabouts

A light at the end of the tunnel that may not be an oncoming train is SolarEdge’s activities in the USA.

“In North America, we are beginning to see some slight growth in installation rates, and we continue to ramp up our US manufacturing capacity,” said Mr. Lando. “This is a major opportunity both for SolarEdge and for our customers.”

SolarEdge’s first facility in Austin, Texas, opened late last year and hit a quarterly manufacturing run rate of 50,000 Home Hub Inverters in Q2 this year. A second facility in Seminole, Florida, shipped 20,000 power optimizers during the quarter.

“SolarEdge has already helped to create ~1,500 new jobs, with the expectation that this will increase to ~1,750 jobs across the two facilities by the end of 2024,” stated the firm last week.

The company set up manufacturing in the USA following incentives offered by the Inflation Reduction Act (IRA) of 2022.

The jobs created in the USA is good news, but no comfort to those who have or are about to lose theirs.

Original Source: https://www.solarquotes.com.au/blog/solaredge-staff-layoffs-mb2967/