24

Gigawatts

SolarEdge has shipped 24 GW of inverter systems to over 130 countries since 2010

31.4%

CAGR

in revenues, 2016 - 2020

4.4

Million Metric Tons

of greenhouse gas emissions have been avoided by SolarEdge' solar PV inverter systems as of 2019


The Path to Drawdown: PV Solar

To mitigate climate change and remain below 1.5ºC above pre-industrial global temperature, we need to transition away from burning fossil fuels to 100% emissions-free energy sources.

A powerful source of this clean energy is the sun (along with nuclear, wind, hydroelectric, and geothermal energy). Photovoltaic (PV) solar panels (the kind you see on rooftops) have emerged as the predominant way of capturing the sun's energy and converting it into electricity.

The industry has been growing fast. As of 2020, solar panels are now the cheapest source of electricity in most places on earth.

Solar produces  around 2% of global electricity today. According to Project Drawdown, to be on the path to remain under 1.5ºC of warming, rooftop and utility scale solar will need to be generating a combined ~40% of global electricity by 2050.

To get there, the PV solar industry will need to keep scaling massively over the few next decades:

  • 457 TWh of solar electricity generated in 2018
  • 28,200 TWh needed by 2050
  • CAGR of 13.75% from 2018 - 2050


Analysis from the IEA also projects that, to reach a 100% clean electricity grid by 2050, annual addition to the solar panel manufacturing capacity will need to increase from 134 GWs in 2020 to 630 GWs in 2030 (p. 74).

About

SolarEdge Technologies, Inc. (stock ticker: SEDG) is a provider of power optimizer, solar inverter and monitoring systems for residential, commercial and small utility-scale solar installations. It has more recently expanded into other areas of energy technology, including energy storage systems, backup electric vehicle components and charging capabilities, and many more. Headquartered in Herzliya, Israel, SolarEdge has offices in the US, Germany, Italy, and Japan.

SEDG's Role in Drawdown

SolarEdge’s main products are inverters and power optimizers which are a critical component in making rooftop solar panels an efficient source of renewable energy.

Harvesting the energy from solar panels requires converting the variable direct current (DC) that the panels generate into utility frequency alternating current (AC). AC can then be fed into a commercial electrical grid or used by local, off-grid electrical networks. The piece of machinery that converts DC into AC is the inverter.

But if a solar PV system is partially covered by shade or debris, or has panels with multiple orientations, the energy generated by the system as a whole will be dragged down by the worst-performing panel.

A power optimizer accounts for this problem. By being connected to each solar panel and tracking and maximizing their voltage before sending it to the inverter to be aggregated, power optimizers enhance the efficiency of solar systems.

SEDG: What We Like

SolarEdge has been growing aggressively over the past several years by shipping more inverters and power optimizers, and by expanding into other areas of renewable energy technology:

Amidst this expansion, SolarEdge has made commitments to reduce their GHG emissions:

  • In 2020 they set a goal (p. 28) to reduce GHG emissions by 30% per one million dollars in revenue and to reduce emissions by 20% per GW inverter power supplied to customers

In 2019 they introduced (p. 28) zero-emission solar PV generation as a means of reducing their emissions footprint. Ultimately, the company aims to become a zero carbon manufacturer

SEDG: What We Want to See Improve

Set Clear Timelines for Emissions Reduction Goals


We are excited that SolarEdge has set a quantitative target to reduce GHG emissions. But beyond declaring that this target is a long-term one (p. 28), they don’t specify a timeframe. A clear emissions goal needs to be accompanied by a precise timeline so that investors can hold the company accountable.

Track Scope 3 Emissions


In their 2019 Sustainability Report (p. 35), SolarEdge began reporting their scope 1 and 2 emissions. This is a welcome practice that sets them on the path toward becoming a zero emissions manufacturer. But as a company with a presence in 28 countries (p. 3) and with an extensive supply chain, we would like to see SolarEdge’s scope 3 emissions and to see them persuading their suppliers and customers to reduce their emissions as well.

Switch to Consuming Renewable Energy


We applaud SolarEdge’s move to incorporate solar PV generation (p. 28) to offset the carbon impact of their energy consumption. But the energy generated from solar panels still accounts for far less than 1% of their total energy consumption. This compares to fossil fuel sources accounting for almost 13% (the rest is electricity from the grid). SolarEdge should transform itself into a completely zero emissions company by switching over to renewable sources of energy in their operations, transportation, and distribution.

Other Wind/Solar Inverters Stocks in the Climate Index

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