What happened

Shares of solar energy inverter maker SolarEdge Technologies (SEDG -10.46%) lit up on Wednesday morning after its archrival in inverters -- Enphase Energy (ENPH -3.80%) -- delivered a boffo earnings report for fiscal Q4 2021.

As of 10:40 a.m. ET, SolarEdge stock is up a solid 6%.

Smiling construction worker gives a thumbs up in the middle of a field of solar panels.

Image source: Getty Images.

So what

Releasing earnings after close of trading yesterday, Enphase announced that it beat expectations on both the top and bottom lines. Instead of analysts' expected $396.5 million in Q4 sales, Enphase delivered $412.7 million. Instead of the anticipated $0.58 per share in profit, Enphase earned $0.73.  

But why is SolarEdge stock rising on good news from its rival?

Well, consider what Enphase said yesterday about the solar energy market in general. Enphase's revenue increased 74% year over year in 2021, indicating generally strong demand for solar energy products, and revenue in Europe more than doubled. In fiscal Q1 2022 already underway, "overall customer demand ... is quite robust." And as for profit margins on revenue, Enphase said it was "confident of the gross margin trajectory."  

Now what

Looking farther into the future and considering the implications of growing acceptance of electric vehicles worldwide, Enphase predicted that "the increasing penetration of EVs has implications for home energy management. Homes will consume significantly more power with an EV" -- power demands that residential solar energy systems can help meet.

And as fast as the business is growing in the U.S., Enphase says it's even more "excited" about Europe, and even business in the U.K. "is starting to ramp up." Long story short, the market for solar products, and solar power inverters, is growing nicely -- and that's good for all market participants: for Enphase, and for SolarEdge, too.