Energy technology firm Enphase Energy (NASDAQ:ENPH) — which develops and manufactures solar microinverters, battery energy storage and electric vehicle (EV) charging stations for residences — enjoyed a solid performance this morning. The company just announced an expanded partnership with German roof manufacturer Creaton, which will now exclusively offer Enphase IQ batteries. This disclosure sent ENPH stock up more than 5%, although shares have settled down a bit since.
In 2020, Enphase and Creaton initiated their collaboration through offering “in-roof solar systems.” Powered exclusively by Enphase IQ7 and IQ7+ microinverters, these solutions serve households across Germany. Now, under the expanded partnership, Creaton will “integrate battery installations into solar roofing projects to provide customers an end-to-end roofing and home energy management experience using industry-leading products and services.”
Matthias Meir, head of Creaton’s PV division, had the following to say about the partnership:
“We’re pleased to work with Enphase to bring our customers a complete experience using IQ Microinverters and IQ Batteries to enable more energy independence with reliable and clean solar power.”
In the release, Enphase Chief Commercial Officer Dave Ranhoff added that Creaton “continues to prove its industry leadership with an innovative business model.” The company offers roofing, construction and “home solar and battery installation.”
ENPH Stock May Rise on Geopolitical Implications
According to its corporate profile, Enphase “shipped more than 48 million microinverters” and deployed more than “2.5 million Enphase-based systems” across 140-plus countries. However, for ENPH stock, the German and broader European market may provide some ongoing upside catalysts in particular.
Germany and its NATO allies have opposed Russia’s invasion of Ukraine, which started earlier this year. Since the invasion, one of the consequences of the action has been the untrustworthiness of Russia as a stable economic partner. What’s more, following the invasion, many European leaders fast-tracked renewable energy initiatives. That fundamentally bolsters ENPH stock.
In response to western support for Ukraine, Russia has also made the decision to significantly cut natural gas to Europe. In turn, regional fears have arisen around an energy crisis.
To be clear, ENPH stock and the broader renewable energy sector do not represent panaceas. Out of the main energy sources, solar energy is one of the least reliable with a capacity factor of 24.9%. In contrast, natural gas features a capacity factor of 56.6%.
At the same time, though, the Enphase-Creaton partnership has the potential to mitigate sticker shock for several German households. Over time, Enphase will enjoy the possibility of leveraging this geopolitical relevance into broader expansion, thus explaining the positive sentiment toward ENPH stock.
On the date of publication, Josh Enomoto did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
