Mizuho downgrades Enphase on weak residential solar demand

Investing.com -- Mizuho downgraded Enphase Energy to Neutral from Buy and cut its price target by 26% to $37, on expectations of weaker residential solar demand in 2026 and uncertainty around the company’s new lease-and-loan financing model.

The brokerage said it now expects U.S. residential solar installations to fall 20% next year to 3.8 gigawatts, with Enphase’s market share slipping as more homeowners adopt third-party ownership (TPO) models, such as leases offered by Sunrun and other installers.

Enphase’s approach, which does not rely on TPO, is seen as more complex for customers and less likely to drive near-term growth.

Mizuho expects Enphase’s U.S. microinverter sales to decline 8% year-on-year in 2026, with sell-through down 28%, partly cushioned by about $200 million in “safe harbor” orders expected in mid-2026 for projects due between 2029 and 2030.

The analysts see a near-term boost in the third quarter from those safe-harbor sales but warned that fourth-quarter guidance could miss consensus due to slower inventory movement ahead of a federal tax credit step-down.

Battery demand remains a bright spot, with attachment rates projected to rise to 20% and margins improving as new products launch, Mizuho said. But the firm said Enphase continues to lose share among new homebuilders and third-party installers.

“Our downgrade reflects reduced resi solar demand in 2026, lower solar market share due to lease switching, limited visibility into the success of a new lease+loan financing model for tail end of installers, and as cost declines from IQ9 tech adoption is limited to commercial market,” Mizuho analysts said.

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