Enphase stock tumbles after hours as U.S. home solar sales drop 35%
Enphase Energy shares fell about 14% after hours Tuesday after the home solar equipment maker said U.S. sell-through fell 35% from a year ago and forecast fourth-quarter revenue of $225 million to $255 million, well below the roughly $300 million analysts expected.
AI-assisted · US Brief desk · Sources listed below
What happened
Enphase Energy shares dropped about 14% in after-hours trading Tuesday, CNBC and Investing.com reported, after the Fremont, Calif., company posted weak third-quarter results and a fourth-quarter forecast far below Wall Street's. Enphase makes microinverters, the small boxes that convert power from each rooftop solar panel for use in a home, along with home batteries.
The tax credit: Section 25D gave homeowners a credit worth 30% of the cost of solar panels, home batteries and similar equipment. The 2025 tax and spending law, Public Law 119-21, ended it for any system whose installation was completed after Dec. 31, 2025, according to the IRS. Paying in 2025 did not qualify a system finished in 2026, the IRS said, though people who installed earlier can still carry unused credits forward.
The numbers: Revenue was $293.3 million, about flat with the second quarter's $291.9 million but down from $410.4 million a year earlier, according to the release. Adjusted earnings were 41 cents a share; analysts expected about 51 cents and revenue of about $304 million, Investing.com reported. Enphase guided fourth-quarter revenue to $225 million to $255 million, versus a consensus near $300.5 million, and said it expects global sell-through to fall about 10% from the third quarter.
Why it matters
Enphase's numbers are one of the clearest public readings on whether American homeowners are still buying solar. Its U.S. sell-through, meaning Enphase products that distributors sold on to installers, rose 5% from the second quarter but fell 35% from a year earlier, according to the release. CEO Badri Kothandaraman said the U.S. market "continues to face headwinds from higher interest rates and the expiration of the Section 25D federal tax credit."
More context
What the forecast hides: Both quarters lean on "safe harbor" revenue, $85.0 million in the third quarter and about $51.2 million expected in the fourth, according to the release. Without it, fourth-quarter revenue would be roughly $174 million to $204 million by US Brief's arithmetic, compared with about $208 million on the same basis in the third quarter. Global sell-through rose only about 1% in the third quarter, short of the roughly 10% Enphase had expected, and European sell-through fell 12%, the company said.
Where Enphase is betting: The company is developing a solid-state transformer, called IQ SST, to power AI data centers. It said it is working with "a leading hyperscaler and a global AI computing leader," has more than 50 potential customers and partners, and expects pilots in 2027 and commercial shipments in 2028. It also pointed to a new home battery, a prepaid lease program called Propel and commercial solar products.
From the release, in the company's words: "Our core U.S. residential solar market continues to face headwinds from higher interest rates and the expiration of the Section 25D federal tax credit. We are addressing these near-term challenges while positioning Enphase for a new phase of growth."
What's still unknown: Where the stock settles when regular trading opens Wednesday; how much of the U.S. drop comes from the lost credit versus borrowing costs, which Enphase did not split out; whether leases like Propel, which can still use commercial credits, replace homeowner purchases; and whether the data center product wins paying customers before its 2028 target.
4 listed sources
- Enphase Energy third-quarter 2026 results release (GlobeNewswire), Oct. 27, 2026
- CNBC after-hours movers, Oct. 27, 2026
- Investing.com, Oct. 27, 2026
- IRS, FAQs on energy credits modified by Public Law 119-21 (FS-2025-05), Aug. 21, 2025
References listed by US Brief; a source count is not a verification score.
Editorial sourcing notes
Results, guidance and the CEO's explanation come from Enphase's third-quarter earnings release. After-hours stock moves and analyst estimates come from CNBC and Investing.com; after-hours prices can change before Wednesday's open. Tax credit details come from the IRS. The underlying-revenue range is US Brief's arithmetic from figures in the release. The hero is a 2016 file photo of a solar installation in upstate New York, not an Enphase site; the body photo is a 2011 file photo of an older Enphase microinverter.
Like US Brief? You can support it with a tip.