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More Tough Times For Solar? Enphase Cuts IPO Range

March 28, 2012

As solar companies continue to get dragged through the gutter due to over supply and lackluster demand for panels, Enphase Energy dropped another bomb on the industry today by announcing they are slashing the price range of its upcoming initial public offering.

Potential investors will now have the opportunity to purchase shares in the $6 to $7 range, a steep decline from the $10 to $12 previously announced.  Despite the drop in price, the Petaluma, California-based company will still offer 7.27 million shares to the public. Enphase will raise $47 million in the IPO if the midpoint of the new range is achieved.

While delivering a revolutionary inverter that is more efficient and easier to deploy than its competitors, Enphase Energy has its share of critics. Potential customers have openly questioned the company’s ability to fulfill orders while others have doubted the durability and reliability of their inverters.

Enphase hasn’t exactly helped its IPO prospects either. Since announcing its IPO plans in June 2011, the company’s loss margin has continued to widen. In 2011, the company lost $32.3 million, a 48 percent increase from the $21.8 million lost in the previous year. During that same period revenues rose 142 percent from $61.7 million to $149.5 million.

Even though Enphase isn’t exactly the first choice for utility-scale solar installations, the company has made strong inroads in the residential solar market. Today’s announcement can’t be seen as a positive for the overall solar industry.

Enphase Energy has applied for the symbol ENPH to be listed on the Nasdaq Global Market.

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