Enphase Energy (ENPH -8.77%) has been one of the hottest energy stocks on the market over the last year and a half -- and for good reason. The company has doubled revenue over the last year and built some valuable partnerships. 

The microinverter portion of the solar market that Enphase operates in has proven to be extremely valuable for a variety of reasons. It can be the "brains" of a solar installation and can work with virtually any solar module for any installer. That expands the company's potential market. The market has rewarded the stock handsomely. But will the run last? 

ENPH Chart

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Why microinverters are hot

Most rooftop solar installations are now required to have a module-level control that can shut the panel down in case of a malfunction to reduce the risk of fire. Including this feature changes how solar installations are done. 

It used to be that solar panels would be put on a roof and then connected to a central inverter, known as a string inverter. That system now either needs to include a power optimizer, which is what SolarEdge Technologies (SEDG -7.45%) makes, or a microinverter from a company like Enphase. The company's products are essentially mandated by regulators. 

Residential roof with solar panels.

Image source: Getty Images.

SunPower gives Enphase a boost

Just because a product is mandated doesn't mean you're guaranteed to win the market. SolarEdge has been the market share leader for a long time and isn't giving up the title anytime soon. But when SunPower (SPWR -3.89%) sold Enphase its microinverter business and agreed to use it as its exclusive supplier for microinverters, Enphase's market share jumped considerably. 

Add in the fact that SunPower's residential and commercial solar business is growing in the U.S. and you have even more tailwinds. The company has since announced partnerships with Q Cells to put microinverters on at the factory . This is the kind of integration any supplier dreams of having in the energy market.

Growth opportunities have just begun

Most of the revenue Enphase Energy generates today is from the residential solar market. But that's just the beginning of the companies' plans. It has an energy storage solution for residential customers and plans to grow into small commercial solar and off-grid solar and storage. These are markets that could grow its servicable available market from $3.3 billion last year to $12.5 billion in 2022. 

These are natural product extensions for a microinverter company and they may be attractive to some installers who are looking for a one-stop-shop for their integrated solar components. 

Has Enphase run too far too fast? 

After its fast run-up, Enphase's stock is pricey by any measure. Shares trade for 34 times earnings and nearly 11 times sales, which is rich for a renewable energy stock. But the module-level power electronics business has proven to be where value is added for the solar industry. Growth by SunPower, Q-Cells, and other partners could continue for many years. 

While I think Enphase's stock is very expensive, it's a well-positioned company with valuable partnerships. Its growth may not continue at the rate of the past year, but that doesn't mean this won't be a great stock for investors long-term. And that's why I think the stock is a buy today.