Solar Industry Crimped by Supply-Chain and Logistical Challenges

Source: By Brian Eckhouse, Bloomberg • Posted: Wednesday, May 5, 2021

Supply-chain headaches for everything from glass to shipping capacity are pinching the solar industry.

SolarEdge Technologies Inc. tumbled as much as 16%, the most in almost four months, after warning that margins will shrink slightly in coming months amid logistics-related cost pressures.

The solar industry is facing a constellation of issues this year including higher prices for steel and aluminum, as well as elevated freight costs. SolarEdge’s disclosure came a week after rival solar-parts maker Enphase Energy Inc. said there’s no sign the worldwide shortage of semiconductor components will abate any time soon.

“Boiling the bevy of issues down, they all impact gross margins — and gross-margin trends historically have been leading indicators of how the stocks trade,” Jeff Osborne, an analyst at Cowen & Co., said in an email.

In early April, Maxeon Solar Technologies Ltd. said “the solar industry faces pervasive upstream supply chain cost challenges.” The panel manufacturer said then that elevated costs for glass, solar cells and freight “may persist well into the second half of 2021.”

— With assistance by Michael Bellusci