Shares of microinverter manufacturer Enphase Energy Inc. (NASDAQ:ENPH) jumped as much as 13.4% in trading Tuesday after one of its customers got some positive tariff news. At 3:10 p.m. EDT, shares were trading 13% higher and seem poised to end the day up double digits.
The good news wasn't actually about Enphase Energy today, it was about SunPower (NASDAQ:SPWR). It was SunPower that got an exemption from solar tariffs for its interdigitated back contact solar panels. In short, its high-tech, high-efficiency solar panels won't be subject to tariffs, making them much less expensive to bring into the U.S.
Enphase is now the sole microinverter supplier to SunPower, so if demand for high-efficiency panels increases because they become more cost competitive, it would be good for the company. We're not yet clear what the financial impact will be on either company, but a tariff exemption is a big deal for SunPower and could save the company $100 million over the next year.
There's no question the tariff exemption will be good for SunPower, but we don't know how much impact it will have on Enphase Energy. The company will need to see increased volumes, not just lower solar panel costs, to have a big impact, and we don't yet know what volume change there might be. I'm bullish on Enphase and its partnership with SunPower, but I think the market got a little overexcited today.