US Credits And Battery Storage Will Drive Change Amid Challenges

Analysts have raised SolarEdge Technologies’ price target to $22.14, citing expectations for U.S. and European market share gains, improved sales growth, and near-term policy tailwinds despite longer-term demand headwinds, margin pressures, and regulatory uncertainty.

Analyst Commentary

• Policy changes, including the phasing out of residential solar tax credits (25D) starting in 2026 and new lease restrictions, are expected to weigh on end-demand beyond 2028, prompting both bearish and neutral stances from some analysts.
• Bullish analysts highlight SolarEdge’s advantage as a lower-cost provider with a stronger third-party ownership (TPO) mix, positioning it as a relative winner in U.S. residential solar compared to rivals like Enphase, especially as the “One Big Beautiful Bill” (OBB) creates favorable market dynamics for leasing and storage.
• Market share gains in the U.S. and Europe, normalization of European channels, and expectations for ~20% sales growth provide optimism for SolarEdge despite overall market demand softness.
• The removal of the proposed excise tax on foreign content and provision for a four-year safe harbor for projects started within 12 months are viewed as near-term positives, strengthening the policy outlook for SolarEdge and peers.
• Several analysts remain cautious due to the risk of continued short-covering-driven volatility, the possibility of downside linked to stricter FEOC regulations and penalty provisions, and overall pressure on margins and demand resulting from the policy environment.

What's in the News

• The EPA under the Trump administration plans to withdraw $7B in rooftop solar grants from the Solar for All program, potentially impacting solar deployment momentum nationwide and affecting companies relying on distributed solar growth (The Washington Post).
• SolarEdge issued Q3 2025 revenue guidance of $315M–$355M, providing a forward look at anticipated sales amid ongoing solar industry challenges (Key Developments).
• SolarEdge announced a strategic partnership with Schaeffler to install approximately 2,300 EV charging points at Schaeffler sites in Europe, leveraging SolarEdge’s Wevo technology and software for integrated employee and fleet vehicle charging (Key Developments).
• SolarEdge secured an agreement with Solar Landscape to supply domestically manufactured solar technology for over 500 commercial rooftop projects across the U.S. in 2025–26, supporting U.S. supply chain resilience and expanding distributed generation (Key Developments).
• The company ramped up operations at its new manufacturing site in Salt Lake City, Utah, now producing its full suite of residential inverters, Power Optimizers, and Home Batteries domestically, aligning with U.S. energy independence objectives and creating over 2,000 local jobs (Key Developments).

Valuation Changes

Summary of Valuation Changes for SolarEdge Technologies

• The Consensus Analyst Price Target has risen from $20.84 to $22.14.
• The Net Profit Margin for SolarEdge Technologies has significantly risen from 0.72% to 1.17%.
• The Future P/E for SolarEdge Technologies has significantly fallen from 170.85x to 114.99x.