Enphase Energy’s Q1 2026 revenue dropped to $282.9 million, down QoQ and YoY, driven by a sharp decline in US residential solar demand
Its safe harbor shipments increased, but overall sell-through demand in the US fell significantly
Analysts see continued pressure in the near term, but expect SST as a long-term positive for the company
Enphase Energy has reported total revenue of $282.9 million for the first quarter of 2026, down from $343.3 million in the previous quarter, reflecting weaker performance in its key US market.
The quarterly revenue included $34.5 million from safe harbor shipments, up from $20.3 million in Q4 2025. Enphase says this was mainly due to its US revenue declining about 23% sequentially, impacted by the expiration of the federal residential clean energy tax credit (Section 25D) at the end of 2025, and typical seasonal softness (see OBBBA Could Cut US Residential Solar Capacity By 46% By 2030).
The sell-through demand for its products in the US dropped sharply, down 48% from Q4 2025 and 18% year-on-year (YoY) (see Q1 2025 In Line For Enphase Energy; Expects Tariff Impact In Q2). In contrast, the company recorded stronger performance in Europe, where revenue increased approximately 36% from the prior quarter, even as it experienced softening demand in the previous quarter (see Enphase Energy’s Q4 2025 Revenue Drops; Announces Layoffs).
ROTH analysts also note that the US residential market environment deteriorated between Enphase’s Q4 2025 and Q1 2026 quarterly earnings calls. The shortfall reflects a weaker-than-expected US residential solar market, affected by financing challenges, slower third-party solar adoption, and industry disruptions, though Enphase had no exposure to the Freedom Forever bankruptcy reported earlier this month. Yet, Enphase could get a ‘fair share of volume’ from Freedom Forever’s market share to be redistributed among existing installers.
Gross margin for the reporting quarter at 35.5% dropped from 44.3% in Q4 2025 and 47.2% in Q1 2025. The US-based microinverter and storage solutions provider narrowed its net loss to $7.4 million from $38.7 million and $29.7 million over the same period, respectively.
However, its operating loss expanded from the previous quarter’s $22.4 million to $29.6 million.
It shipped close to 1.39 million microinverters from its US manufacturing facilities, booked for Section 45X Production Tax Credits (PTC), along with 49.5 MWh of IQ batteries from Texas fab out of 103.1 MWh of total shipments (150.1 MWh in Q4 2025).
Analysts at ROTH do not expect a quick recovery in the US residential segment, as it remains dependent on tax credits and impacted by a pause in tax equity financing. However, for Enphase, they highlight a long-term positive in its new Solid-State Transformer (SST) technology roadmap.
Enphase is developing its 1.25 MW IQ SST product for data centers to address the challenges of capacity, dynamic response, and efficiency. It is a distributed SST platform designed to convert medium-voltage AC directly to low-voltage DC in a single stage. It will be built as a supercluster of 342 power modules designed to deliver native 800 V DC output for next-generation AI racks. Enphase says this platform will have a fast response on the order of 1 to 3 ms.
Enphase sees potential for this technology given the US data center power demand expanding to around 80 GW by 2031 versus 26 GW of AI-dedicated active capacity.
Demonstrations for the SST are planned in 2026, pilot projects in 2027, and commercial shipments by 2028. This could become a meaningful growth driver for the company over time, though it will require patience, as per the analysts.
For Q2 2026, Enphase forecasts revenue to range from $28 million to $310 million, including 100 MWh to 110 MWh of IQ Battery shipments. This outlook includes approximately $85 million of safe harbor shipments.
GAAP gross margin is expected to be within the 42.0% to 45.0% range, while operating expenses will be within $120 million to $124 million.