The future of the solar industry was seemingly cast into serious doubt last year when the Trump administration rescinded Biden-era tax credits for wind, solar, and other clean sources of energy. 

While many worried that this shift would bring about the end of renewable energy investment in general and solar energy in particular, that expectation hasn’t come to pass.

It’s been reported that power plant developers plan to add roughly 43 gigawatts (“GW”) of new utility-scale solar capacity to the grid in 2026, up from the 27 GW added in 2025. 

The continued investment in solar capacity is being driven by soaring energy demand. According to revised estimates from the Federal Energy Regulatory Commission (“FERC”), peak energy demand could rise to as much as 947 GW by 2029.

With the grid being strained by rising demand from residential, commercial, and the AI boom, the search for other sources of power has only intensified.

And that backdrop puts Enphase Energy (ENPH) in a favorable position.

Enphase Energy designs and sells microinverters, solar kits, batteries, solar power management systems, power packs, and EV chargers for residential and commercial use cases. Its primary customers include homeowners, installers, and distributors. 

The company’s microinverters stand out due to its unique integration of semiconductors, which allows end users to monitor performance data through a cloud-based energy management platform.

Enphase also operates Solargraf, a platform that enables installers to track leads, make proposals, access financing and issue contracts, secure permits, track installations, and track operations and maintenance activities. 

As of March 2026, the company has shipped nearly 88 million microinverters and 2.50 GWh of energy storage systems. Its Solargraf platform is also widely used, with nearly 2,000 installers registered to the platform. Over 5 million of its systems are installed across the globe. 

Enphase’s offerings and asset-light model have enabled it to deliver strong returns. Last year, it delivered a Uniform return on assets (“ROA”) of 24%—double the 12% corporate average— alongside 17% asset growth.

That said, market expectations for the company remain muted. Investors are forecasting the firm’s return to dip slightly to 21% by 2030.

This valuation indicates investors are cautious amid policy uncertainty and solar demand volatility.

Enphase’s strong product ecosystem, global footprint, and strong demand for solar energy can support earnings growth and attractive long-term returns. This could be an opportunity to capitalize on wider market pessimism towards the solar industry.

Best regards,

Joel Litman & Rob Spivey
Chief Investment Officer &
Director of Research
at Valens Research

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